The simple one-good model of life-cycle consumption requires that consumption be continuous over retirement; yet prior research based on partial measures of consumption or on synthetic panels indicates that spending drops at retirement, a result that has been called the retirement-consumption puzzle. Using panel data on total spending, nondurable spending and food spending, we find that spendin...

This paper uses data from the British Household Panel Survey to shed further light on the fall in consumption at retirement (the “retirement-consumption puzzle”). Comparing food spending for men retiring involuntarily early (through ill health or redundancy) with spending for those who retire voluntarily, it finds a significant fall in spending only for those who retire involuntarily. This is c...

Real annual consumption growth has averaged about 3.7% between 1998 Q1 and 2003 Q3—well above real average annual GDP growth of about 2.6% during that period. (2) Chart 1 shows that the buoyancy of consumer spending can be entirely accounted for by strong growth in durable and semi-durable goods expenditure (henceforth referred to as 'durable spending' unless otherwise specified). Since 1998 Q1...

We document a secular change in the structure of government consumption spending: Over time purchases relatively more private-sector goods, and relies less on its own production value added. This process alters transmission fiscal policy, by dampening response hours, public added, labor share to spending shocks, while leaving total output unchanged. rationalize these facts general equilibrium m...

The life-cycle model is used by many economists to study savings and retirement behavior. Th e central premise of the model is that individuals will save during their working lives so that they will have adequate resources at retirement (when wages are no longer a source of income) to maintain the standard of living they enjoyed during their working lives. Some empirical fi ndings, however, are...

Recent empirical work finds that government spending shocks can cause aggregate consumption to increase. This paper builds on the framework of imperfect information in Lucas (1972) and Lorenzoni (2009) to show how government spending can stimulate consumption. Owners of firms targeted by an increase in government spending perceive an increase in their permanent income relative to their future t...

Recent empirical work finds that government spending shocks cause aggregate consumption to increase over the business cycle, contrary to the predictions of Neoclassical and New Keynesian models. This paper proposes a mechanism to account for the consumption increase that builds on the framework of imperfect information in Lucas (1972) and Lorenzoni (2009). In my model, owners of firms targeted ...

This paper aims to investigate the role of each aggregate spending component in the monetary policy transmission in Indonesia. It assesses the relative strength of the role of each spending component in the monetary policy transmission. In so doing, this study employs the contribution analysis, which is calculated based on the cumulative impulse response of each component of GDP to a monetary p...

abstract i n this paper we investigated total energy consumption and its individual forms (oil, natural gas, electricity, renewable energies and coal) relationship with real gross domestic product (gdp) in iran. we employed hsiao’s (1981) methodology and annual data which cover 1967-2010 for investigation. the empirical findings indicate there is bidirectional causality effect with real gdp and...

Real household consumption in the United Kingdom increased by about 4% during 2001. This was the sixth consecutive year of above-average growth—the longest above-trend period over the past five decades (see Chart 1). During the second half of the 1990s, consumer spending was boosted by robust growth in households' real disposable incomes, as well as strong gains in household wealth, particularl...