Sheldon Garon, 06 January 2012

Sheldon Garon of Princeton University talks to Romesh Vaitilingam about his book, ‘Beyond Our Means: Why America Spends While the World Saves’. He contrasts continental European and East Asian countries, which have over many decades encouraged their citizens to save, with the US, which has promoted mass consumption and reliance on credit, culminating in the global financial meltdown. The interview was recorded in London in November 2011. [Also read the transcript]

Aloysius Siow, 24 December 2010

Menopause – or post-reproductive survival – is rare among mammals and, from an evolutionary perspective, anomalous since it reduces consumption for current offspring without producing future offspring. Aloysius Siow of the University of Toronto talks to Romesh Vaitilingam about his theory of menopause, which is based on the fact that, unlike other mammals, humans understand the reproductive process. The interview was recorded at the Centre for Market and Public Organisation in Bristol in October 2010. [Also read the transcript]

Tullio Jappelli, Luigi Pistaferri, 02 April 2010

How does consumption respond to a change in income – whether expected or unexpected, temporary or permanent? This column reviews evidence from diverse sources and suggests that if financial market arrangements and liquidity constraints are binding, even changes in income that are predictable can have a significant effect on consumption. This supports the idea that tax changes can have a considerable impact on expenditure.

Ashoka Mody, Franziska Ohnsorge, 17 February 2010

Just how important is consumption for growth? This column suggests that consumption trends in the G7 economies have significant short-term and long-term implications for global growth and global imbalances. For sustained rebalancing of the global economy, however, investment behaviour may be more important.

Robert Flood, Akito Matsumoto, Nancy Marion, 12 January 2010

Financial globalisation makes it easier for individuals to trade financial assets, and that should help them diversify against country-specific risks. But empirical support for improved international risk sharing is limited. This column says that there is evidence of improved international risk sharing, and it comes mostly from the convergence in rates of consumption growth among countries.

Charles Calomiris, William Miles, Stanley Longhofer, 06 July 2009

Economists have expressed fears over the macroeconomic consequences of falling home prices dragging down consumption in the US and other nations. This column says that housing values and consumption are indeed correlated, but once one takes into account the fact that housing price changes may be acting as a proxy for future expected income, the measured housing wealth effect, if it exists at all, is much smaller than popularly believed. That finding suggests that changes in housing wealth have little effect on consumption.

Giancarlo Corsetti, Panagiotis Konstantinou, 18 February 2009

The US net international investment position declined by an astounding magnitude in 2008. Does that imply a massive contraction in US consumption? This column provides empirical evidence that large swings in the US current account are driven by transitory shocks that don’t significantly alter consumption.

John Muellbauer, 20 July 2008

Recent empirical estimates of the housing wealth effect suggest that a UK recession will be hard to avoid. With the housing-wealth decline compounded by falling equity prices and inflation-eroded real incomes, a drop in consumption is in the offing. The US situation could be even worse.


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