Aggregate consumption and debt accumulation: An empirical examination of US household behavior

• Main Authors: KIM, Yun K., SETTERFIELD, Mark, MEI, Yuan
• Format: text
• Language: English
• Published: Institutional Knowledge at Singapore Management University 2015
• Subjects: Consumption; Household borrowing; Household debt; Life-cycle hypothesis; Relative income hypothesis; Behavioral Economics; Macroeconomics
• Online Access: https://ink.library.smu.edu.sg/soe_research/2184; https://ink.library.smu.edu.sg/context/soe_research/article/3183/viewcontent/Aggregate_consumption_and_debt_accumulation_afv.pdf
• Institution: Singapore Management University

The outbreak of the financial crisis in 2008 witnessed a significant contraction in US consumption spending, as households began deleveraging following a period marked by historically high levels of household borrowing. These events call into question the canonical life-cycle theory of consumption,...