The Economics of Consumption: Theory and Evidence

Consumption decisions are crucial determinants of business cycles and growth. Knowledge of how consumers respond to the economic environment and how they react to the risks that they encounter during the life-cycle is therefore important for evaluating stabilization policies and the
effectiveness of fiscal packages implemented in response to economic downturns or financial crises.

In The Economics of Consumption, Tullio Jappelli and Luigi Pistaferri provide a comprehensive examination of the most important developments in the field of consumption decisions and evaluate economic models against empirical evidence. The first part of the book provides the basic ingredients of
economic models of consumption decisions. The central part reviews the empirical literature on the effect of income and wealth changes on consumption and on the relevance of precautionary saving and credit market imperfections. The last chapters extend the basic framework to such important areas as
bequests, leisure, lifetime uncertainty, and financial sophistication.

Jappelli and Pistaferri shed light on important issues, including how consumption responds to changes in economic resources, how economic circumstances and consumers' characteristics influence behavior, and whether consumption inequality depends on income shocks and their persistence.


Author: Tullio Jappelli, Luigi Pistaferri
Publisher: Oxford University Press, USA
Published: 10/02/2017
Pages: 312
Binding Type: Paperback
Weight: 1.45lbs
Size: 9.60h x 6.90w x 1.30d
ISBN: 9780199383153

About the Author

Tullio Jappelli is Professor of Economics and Chairman of the Department of Economics and Statistics at the University of Naples Federico II, a Research Fellow of the Center for Economics and Finance (CSEF) and of CEPR.

Luigi Pistaferri is a Professor of Economics at Stanford University, a Research Fellow of NBER, CEPR, the Ralph Landau Senior Fellow at the Stanford Institute of Economics and Policy Research (SIEPR), and one of the co-editors of the American Economic Review.

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