Unemployment and Consumption

Jim Malley and Thomas Moutos

Oxford Economic Papers, 1996, vol. 48, issue 4, 584-600

Abstract: In this paper, the authors argue that the aggregate unemployment rate is a valuable measure of aggregate income uncertainty. According to the theory of precautionary saving, an increase in income uncertainty would be expected to increase saving. The authors use U.S. quarterly data on the consumption of motor vehicles first to examine whether unemployment has a negative effect on consumption and then to differentiate between the various explanations for this phenomenon. They conclude that the negative relationship between unemployment and consumption is due in large part to precautionary saving motives. Copyright 1996 by Royal Economic Society.

Date: 1996
References: Add references at CitEc
Citations: View citations in EconPapers (24)

Downloads: (external link)
http://links.jstor.org/sici?sici=0030-7653%2819961 ... 0.CO%3B2-F&origin=bc full text (application/pdf)
Access to full text is restricted to JSTOR subscribers. See http://www.jstor.org for details.

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:oup:oxecpp:v:48:y:1996:i:4:p:584-600

Ordering information: This journal article can be ordered from
https://academic.oup.com/journals

Access Statistics for this article

Oxford Economic Papers is currently edited by James Forder and Francis J. Teal

More articles in Oxford Economic Papers from Oxford University Press Oxford University Press, Great Clarendon Street, Oxford OX2 6DP, UK.
Bibliographic data for series maintained by Oxford University Press ().