The asymmetric effects of deflation on consumption spending: evidence from the Great Depression

Jonathan Davis

No 226, Globalization Institute Working Papers from Federal Reserve Bank of Dallas

Abstract: Does expected deflation lead to a fall in consumption spending? Using data for U.S. grocery store sales and department store sales from 1919 to 1939, this paper shows that expected price changes have asymmetric effects on consumption spending. Department store sales (durable consumption) react negatively to the expectation of falling prices, but grocery store sales (non-durable consumption) do not react to expected price changes.

JEL-codes: E20 N10 (search for similar items in EconPapers)
Pages: 10 pages
Date: 2015-02-01
New Economics Papers: this item is included in nep-mac
Note: Published as: Davis, J. Scott (2015), "The Asymmetric Effects of Deflation On Consumption Spending: Evidence from the Great Depression," Economic Letters 130: 105-108.
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Citations: View citations in EconPapers (1)

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Journal Article: The asymmetric effects of deflation on consumption spending: Evidence from the great depression (2015)
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Persistent link: https://EconPapers.repec.org/RePEc:fip:feddgw:226

DOI: 10.24149/gwp226

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