Carroll, Christopher D.; Otsuka, Misuzu; Slacalek, Jiri - 2010
This paper presents a simple new method for measuring `wealth effects' on aggregate consumption. The method exploits … immediate and eventual wealth effects. In U.S. data, we estimate that the immediate (next-quarter) marginal propensity to … consume from a change in housing wealth is about 2 cents, with a final eventual effect around 9 cents, substantially larger …