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A method of testing the relative importance for consumption of risk sharing behavior and changes in current income is proposed and estimated using data across Canadian provinces. The focus of the estimation is less on whether or not the risk sharing model can be rejected than on how much each of these hypotheses can contribute to explaining overall variation in consumption. Both types of behavior are found to be statistically significant, but the risk sharing model is found to explain considerably more of the growth in consumption than does changes in income.

Macroeconomics --- Consumer Economics: Empirical Analysis --- Macroeconomics: Consumption --- Saving --- Wealth --- Personal Income, Wealth, and Their Distributions --- Aggregate Factor Income Distribution --- Consumption --- Income --- Personal income --- Disposable income --- Government consumption --- National accounts --- Economics --- National income --- Canada

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Following the adoption by the international community of the Poverty Reduction Strategy Paper (PRSP) approach, which provides the basis for concessional lending by the multilateral institutions, there has been a resurgence of interest in the poverty and social impact analysis (PSIA) of different policy reforms being considered by the low income countries. This paper reviews some of the major techniques and frameworks for assessing the PSIA. It highlights their strengths and weaknesses and suggests a relatively simple analytical framework for the PSIA based on household survey data. The paper then shows how the suggested framework could be utilized to investigate the poverty/income distributional implications of introducing a value-added tax (VAT). The results indicate that a revenue-neutral uniform VAT is regressive in its impact on different households. In order to mitigate the adverse impact, the paper explores the distributional impact of an alternative policy package consisting of a basic rate of VAT with exemptions and excise taxes for certain commodity groups chosen on the basis of their distributional characteristics. The distributional consequences of the alternative package are found to be superior to those of the uniform VAT.

Investments: Commodities --- Macroeconomics --- Public Finance --- Taxation --- Consumer Economics: Empirical Analysis --- Computable and Other Applied General Equilibrium Models --- Welfare Economics: General --- Taxation and Subsidies: Incidence --- Business Taxes and Subsidies --- National Government Expenditures and Related Policies: General --- Aggregate Factor Income Distribution --- Commodity Markets --- Public finance & taxation --- Investment & securities --- Value-added tax --- Expenditure --- Income --- Consumption taxes --- Commodities --- Taxes --- National accounts --- Spendings tax --- Expenditures, Public --- Commercial products --- Bangladesh

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Boosting growth through rebalancing is critical for addressing pressures from Japan’s aging population. This paper focuses on one important untapped source of growth - private consumption, and argues that the key to reviving consumption is boosting household disposable income through higher wages, especially in services, and higher property income. The paper also suggests that the impact of higher property income on consumption could be potentially large.

Consumption (Economics)--Japan. --- Japan--Economic policy. --- Wages--Japan. --- Labor --- Macroeconomics --- Consumer Economics: Empirical Analysis --- Macroeconomics: Consumption --- Saving --- Wealth --- Aggregate Factor Income Distribution --- Personal Income, Wealth, and Their Distributions --- Wages, Compensation, and Labor Costs: General --- Labour --- income economics --- Income --- Private consumption --- Disposable income --- Consumption --- Wages --- National accounts --- Economics --- National income --- Japan --- Consumption (Economics)

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This paper develops a time series model for aggregate consumption to predict the U.S. personal saving rate. It then uses the model to test whether there has been a structural break in consumption behavior because of the 2008 financial crisis. Before the crisis, the personal saving rate was trending downwards. However, in 2008 there was a significant rise in the saving rate that continued until the end of 2012, suggesting a permanent change in household behavior. To assess this issue formally, the unknown parameters of the model are estimated using data for 1961Q1-2007Q4, a period which precedes the crisis. The model is then used to predict the saving rate from 2008Q1 onwards and to assess whether the rise in the saving rate after 2008 was due to sizable, but transitory, income/wealth shocks or to changes in the underlying elasticities between saving and its determinants (hence structural). The statistical evidence suggests there was no structural break in the household saving behavior, implying that the rise in the saving rate during 2008-2012 was caused by the negative shocks to income, employment and wealth. This result explains why the saving rate resumed its decline in 2013, as real disposable income, employment and net worth recovered. Assuming that the real growth in these determinants remains strong, the estimated model predicts continued negative pressures on the current account deficit and further external imbalances attributable to the U.S. household sector.

Econometrics --- Macroeconomics --- Consumer Economics: Empirical Analysis --- Personal Finance --- Macroeconomics: Consumption --- Saving --- Wealth --- Forecasting and Simulation: Models and Applications --- Personal Income, Wealth, and Their Distributions --- Multiple or Simultaneous Equation Models --- Multiple Variables: General --- Aggregate Factor Income Distribution --- Econometrics & economic statistics --- Consumption --- Disposable income --- Private savings --- Vector error correction models --- Income --- National accounts --- Econometric analysis --- Economics --- National income --- Saving and investment --- Econometric models --- United States

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Has monetary policy in advanced economies been less effective since the global financial crisis because of deteriorating household balance sheets? This paper examines the question using household data from the United States. It compares the responsiveness of household consumption to monetary policy shocks in the pre- and post-crisis periods, relating changes in monetary transmission to changes in household indebtedness and liquidity. The results show that the responsiveness of household consumption has diminished since the crisis. However, household balance sheets are not the culprit. Households with higher debt levels and lower shares of liquid assets are the most responsive to monetary policy, and the share of these households in the population grew. Other factors, such as economic uncertainty, appear to have played a bigger role in the decline of households’ responsiveness to monetary policy.

Monetary policy --- Econometric models. --- Exports and Imports --- Finance: General --- Macroeconomics --- Financial Markets and the Macroeconomy --- Monetary Policy --- Consumer Economics: Empirical Analysis --- Macroeconomics: Consumption --- Saving --- Wealth --- Urban, Rural, and Regional Economics: Household Analysis: General --- International Lending and Debt Problems --- Portfolio Choice --- Investment Decisions --- Aggregate Factor Income Distribution --- International economics --- Finance --- Consumption --- Household consumption --- Debt burden --- Liquidity --- Income --- National accounts --- External debt --- Asset and liability management --- Economics --- Debts, External --- United States