Abstract
Consumption and saving decisions have important effects on individuals and on the whole economy. The chapter begins by examining recent trends in consumption and saving in the major European economies, before setting up a framework for analysis. It then examines the life cycle and permanent income hypotheses, and the Keynesian consumption function. An explanation is given of recent patterns of European consumption and saving, for example, by discussing the effect of financial liberalization. Finally comes an analysis of changes in the UK patterns of spending and saving, including the effect of recent building society windfalls.
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References and further reading
Bank of England (1997) Inflation Report, August.
Bayoumi, T. (1993) ‘Financial Deregulation and Household Saving’, Economic Journal, 103 (421): 1432–43.
Darby, J., Driver, R., Ireland, J. and Wren-Lewis, S. (1994) ‘Controlling Credit: The Macroeconomic Consequences of Reversing Financial Liberalisation’, New Economy, Summer, 95–100.
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© 1998 Julia Darby and Jonathan Ireland
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Darby, J., Ireland, J. (1998). Spending and Saving. In: Atkinson, B., Livesey, F., Milward, B. (eds) Applied Economics. Palgrave, London. https://doi.org/10.1007/978-1-349-14250-7_17
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DOI: https://doi.org/10.1007/978-1-349-14250-7_17
Publisher Name: Palgrave, London
Print ISBN: 978-0-333-67382-9
Online ISBN: 978-1-349-14250-7
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