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Does deflation affect household spending? The case of the Netherlands

Robert-Paul Berben and Ad Stokman

Applied Economics Letters, 2016, vol. 23, issue 10, 685-689

Abstract: This article investigates the impact of deflation on real private consumption and residential investment by Dutch households during the 1980–2013 period. We estimate theoretically founded consumption and investment equations and show that a fall in the general price level significantly negatively affects both growth in real consumption and residential investment. The impact on residential investment is more delayed, but stronger.

Date: 2016
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DOI: 10.1080/13504851.2015.1100242

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