Carroll, Christopher D.; Otsuka, Misuzu; Slacalek, Jirka - 2006
This paper presents a simple new method for estimating the size of 'wealth effects' on aggregate consumption. The … literature) to distinguish between short-run and long-run wealth effects. In U.S. data, we estimate that the immediate (next …-quarter) marginal propensity to consume from a $1 change in housing wealth is about 2 cents, with a final long-run effect around 9 cents …