Who’s Ready to Spend? Constrained Consumption across the Income Distribution

David Dam, Davide Melcangi, Laura Pilossoph and Will Schirmer

No 20210513b, Liberty Street Economics from Federal Reserve Bank of New York

Abstract: Spending on goods and services that were constrained during the pandemic is expected to grow at a fast pace as the economy reopens. In this post, we look at detailed spending data to track which consumption categories were the most constrained by the pandemic due to social distancing. We find that, in 2019, high-income households typically spent relatively more on these pandemic-constrained goods and services. Our findings suggest that these consumers may have strongly reduced consumption during the pandemic and will likely play a crucial role in unleashing pent-up demand when pandemic restrictions ease.

Keywords: consumption; pandemic; COVID-19 (search for similar items in EconPapers)
JEL-codes: D14 E2 (search for similar items in EconPapers)
Date: 2021-05-13
New Economics Papers: this item is included in nep-mac
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