Arbeitspapier
Did US Consumers 'Save for a Rainy Day' Before the Great Recession?
The ‘saving for a rainy day’ hypothesis implies that households’ saving decisions reflect that they can (rationally) predict future income declines. The empirical relevance of this hypothesis plays a key role in discussions of fiscal policy multipliers and it holds under the null that the permanent income hypothesis is true. We find mixed support for this hypothesis using time series data for the 100 largest US Metropolitan Statistical Areas, as well as aggregate macro time series, for the period 1980q1-2011q4. That is, income is more often found to predict consumption and saving than the converse. Our modus operandi is to investigate the ‘saving for a rainy day’ hypothesis by testing (weak) exogeneity of income and consumption and by exploring the direction of Granger causality between the two series. We also give evidence that house price changes played a role in the US income and consumption dynamics, before, during and after the Great Recession.
- Language
-
Englisch
- Bibliographic citation
-
Series: CESifo Working Paper ; No. 5347
- Classification
-
Wirtschaft
Single Equation Models; Single Variables: Time-Series Models; Dynamic Quantile Regressions; Dynamic Treatment Effect Models; Diffusion Processes
Multiple or Simultaneous Equation Models: Time-Series Models; Dynamic Quantile Regressions; Dynamic Treatment Effect Models; Diffusion Processes; State Space Models
Model Construction and Estimation
Model Evaluation, Validation, and Selection
Macroeconomics: Consumption; Saving; Wealth
Fiscal Policy
- Subject
-
cointegration
consumption
Granger causality
permanent income hypothesis
household saving
- Event
-
Geistige Schöpfung
- (who)
-
Anundsen, André Kallåk
Nymoen, Ragnar
- Event
-
Veröffentlichung
- (who)
-
Center for Economic Studies and ifo Institute (CESifo)
- (where)
-
Munich
- (when)
-
2015
- Handle
- Last update
-
10.03.2025, 11:43 AM CET
Data provider
ZBW - Deutsche Zentralbibliothek für Wirtschaftswissenschaften - Leibniz-Informationszentrum Wirtschaft. If you have any questions about the object, please contact the data provider.
Object type
- Arbeitspapier
Associated
- Anundsen, André Kallåk
- Nymoen, Ragnar
- Center for Economic Studies and ifo Institute (CESifo)
Time of origin
- 2015
Other Objects (12)
Did Us Consumers "Save for a Rainy Day" Before the Great Recession?
Did US consumers 'save for a rainy day' before the Great Recession?
When did the 2001 recession really start?
When did the 2001 recession really start?
Did the ACA Medicaid Expansion Save Lives?
How Did U.S. Consumers Use Their Stimulus Payments?
How did China's WTO entry benefit U.S. consumers?
How Did U.S. Consumers Use Their Stimulus Payments?
How did the great recession affect income inequality in Spain?
What Role Did Management Practices Play in SME Growth Post-Recession?
Did bank lending stifle innovation in Europe during the great recession?
No Protectionist Policy Before and During the Great Recession
Did Us Consumers "Save for a Rainy Day" Before the Great Recession?
Did US consumers 'save for a rainy day' before the Great Recession?
When did the 2001 recession really start?
When did the 2001 recession really start?
Did the ACA Medicaid Expansion Save Lives?
How Did U.S. Consumers Use Their Stimulus Payments?
How did China's WTO entry benefit U.S. consumers?
How Did U.S. Consumers Use Their Stimulus Payments?
How did the great recession affect income inequality in Spain?
What Role Did Management Practices Play in SME Growth Post-Recession?
Did bank lending stifle innovation in Europe during the great recession?
No Protectionist Policy Before and During the Great Recession
Did Us Consumers "Save for a Rainy Day" Before the Great Recession?
Did US consumers 'save for a rainy day' before the Great Recession?
When did the 2001 recession really start?
When did the 2001 recession really start?
Did the ACA Medicaid Expansion Save Lives?
How Did U.S. Consumers Use Their Stimulus Payments?
How did China's WTO entry benefit U.S. consumers?
How Did U.S. Consumers Use Their Stimulus Payments?
How did the great recession affect income inequality in Spain?
What Role Did Management Practices Play in SME Growth Post-Recession?
Did bank lending stifle innovation in Europe during the great recession?