The effect of wealth on consumption is an issue of longstanding interest to economists. Analysts believe that fluctuations in household wealth have driven major swings in economic activity. This paper considers so-called wealth effects - the impact of changes in wealth on household consumption...

The effect of wealth on consumption is an issue of longstanding interest to economists. Conventional wisdom suggests that fluctuations in household wealth have driven major swings in economic activity. This article considers so-called consumption wealth effects. There is an extensive existing...