Household Consumption Through Recent Recessions

Thomas Crossley (), Hamish Low and Cormac O’Dea ()
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Cormac O’Dea: Institute for Fiscal Studies and University College London
Authors registered in the RePEc Author Service: Cormac O'Dea

Koç University-TUSIAD Economic Research Forum Working Papers from Koc University-TUSIAD Economic Research Forum

Abstract: This paper examines trends in household consumption and saving behaviour in each of the last three recessions in the UK. The ‘Great Recession’ has been different from those that occurred in the 1980s and 1990s. It has been both deeper and longer, but also the composition of the cutbacks in expenditure differs, with a greater reliance on cuts to nondurable expenditure than was seen in previous recessions, and the distributional pattern across individuals differs. The young have cut back expenditure more than the old, as have mortage holders compared to renters. By contrast, the impact of the recession has been similar across education groups. We present evidence that suggests that two aspects of fiscal policy in the UK in 2008 and 2009 - the temporary reduction in the rate of VAT and a car scrappage scheme – had some success in encouraging households to increase durable purchases.

Keywords: Consumption; Spending; Recessions (search for similar items in EconPapers)
JEL-codes: D12 E21 (search for similar items in EconPapers)
Pages: 27 pages
Date: 2011-11
New Economics Papers: this item is included in nep-cba, nep-ene and nep-mac
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (1)

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Related works:
Journal Article: Household Consumption through Recent Recessions (2013)
Working Paper: Household consumption through recent recessions (2011)
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