Tous les séminaires
Jeudi 5 Novembre 2015
Morten RAVN (UCL, London)
présentera une communication :
"(S)Cars and the Great Recession"
de 14 h à 15 h 30 en salle S016 au CREST, 15 Boulevard Gabriel Péri, 92245 MALAKOFF (Métro : Malakoff/Plateau de Vanves (Immeuble "Malakoff 2)).
In this paper we use household consumer choices to inform about the shocks that households perceived affecting their current and future economic opportunities during the Great Recession. We first use the Consumer Expenditure
Survey to derive cohort and business cycle decompositions of consumption profiles. We note that the Great Recession witnessed a stark decline in consumption expenditure especially of durable goods of which car purchases is a
key component. Moreover, when decomposing the car expenditure data we not that the Great Recession was different than previous recession. We interpret the evidence through the prism of a very rich life cycle model where individuals are subject to idiosyncratic uninsurable income shocks, aggregate income shocks, wealth shocks, credit shocks and shocks to the user cost of durables.Cars are large and costly to transact. This implies an (S,s) type of
behaviour. We show that, because of their salience and the transaction costs, cars are particularly sensitive to changes in the perception of future expected in come and its variability. We find that lifec-cycle profile shocks and wealth
shocks are important determinants of consumption choices during the Great Recession.