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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.
List of contents
- Table of Contents
- CHAPTER 1 - INTERTEMPORAL CHOICE UNDER CERTAINTY
- CHAPTER 2 - THE AGE PROFILE OF CONSUMPTION AND WEALTH
- CHAPTER 3 - COMPLETE MARKETS
- CHAPTER 4 - THE CERTAINTY EQUIVALENCE MODEL
- CHAPTER 5 - LIQUIDITY CONSTRAINTS
- CHAPTER 6 - THE PRECAUTIONARY SAVING MODEL
- CHAPTER 7 - THE BUFFER STOCK MODEL
- CHAPTER 8 - THE RESPONSE OF CONSUMPTION TO ANTICIPATED CHANGES IN INCOME
- CHAPTER 9 - THE RESPONSE OF CONSUMPTION TO UNANTICIPATED CHANGES IN INCOME
- CHAPTER 10 - THE RESPONSE OF CONSUMPTION TO INCOME RISK
- CHAPTER 11 - LIFETIME UNCERTAINTY
- CHAPTER 12 - BEQUEST MOTIVES
- CHAPTER 13 - TIME, HABITS AND CONSUMER DURABLES
- CHAPTER 14 - NON-STANDARD PREFERENCES
- CONCLUSIONS
- REFERENCES
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.
Summary
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.
Additional text
This book provides the synthesis of the vast research field of the economics of consumption in a coherent and accessible way.
