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This paper examines the relationship between aggregate consumer spending and credit availability in the United States. The author finds that consumer spending falls (rises) in response to a reduction (increase) in credit availability. Moreover, she provides a formal assessment of the possibility that credit availability is particularly important for consumer spending when it undergoes large changes. In this respect, she estimates a consumption function in which only large expansions and contractions in credit affect spending. She concludes that large changes in credit availability are particularly important for consumers' spending decisions. As should be expected, these periods tend to be associated with periods of high economic uncertainty. These results show that credit availability should be taken into account when modeling and forecasting consumer spending. -- Credit and credit aggregates ; Domestic demand and components ; Recent economic and financial developments

In the study of consumer spending a wide variety of factors, ranging from age, sex, and family size, through occupation, religion, and class background, to future expectations, advertising and personal influence, and compulsiveness, have been shown to have some influence on consumer taste and demand. Yet the precise influence these factors have, and the value which they should be assigned are still largely unknown. This paper offers a theoretical framework as one possible way of treating factors involved in consumer spending in a systematic manner. The approach is still in the process of formulation so that only the general structure of the theory can be presented.Two assumptions are made about factors which influence consumer spending. First, it is assumed that factors may be treated as aspects of social systems or sub-systems. They may be viewed as contributing to one or other of the problems which all social systems must solve, to what have been called the adaptive, the goal attainment, the integrative, and the pattern-maintenance-tension-management problems. Thus factors are related to one another, in the first instance, by means of their functioning for the solution of system problems. Secondly, it is assumed that all factors do not have the same order of influence on consumer spending. Rather, factors are related to one another in a hierarchical way so that some can be treated as more general in their influence than others, and as unifying the more specific factors in some way. This view is derived from the more general assumption that social systems are composed of a number of distinct levels of structural organization.

THIS PAPER OFFERS NEW EMPIRICAL ESTIMATES OF THE DIFFERENCE IN CONSUMER SPENDING PROPENSITIES FROM TEMPORARY AND PERMANENT INCOME TAX CHANGES. OVER A 1-YEAR PLANNING HORIZON, A TEMPORARY TAX CHANGE IS ESTIMATED TO HAVE ONLY A LITTLE MORE THAN HALF THE IMPACT OF THE SAME SIZE PERMANENT CHANGE, AND REBATE IS ESTIMATED TO HAVE ONLY ABOUT 38 PERCENT OF THE IMPACT.

The Bureau of Economic Analysis announced today that seasonally adjusted U.S. real GDP grew at a 4.9% annual rate in the third quarter. That's well above the U.S. historical average growth rate of 3.1%. The new data put the Econbrowser recession indicator index at 3.0%. The current U.S. expansion has now continued for over three […]