Macroeconomic Policy and Household Economics
Abstract: Multiperson households are less reliant on cash than single people because they are more likely than singles to rely on home-based production to meet their daily needs. This conclusion, supported by recent empirical research, suggests that fiscal and monetary policies that make market-based transactions more expensive will favor the formation of households. Individuals will seek to minimize costs due to such policies by forming partnerships, whether through marriage or less-formal arrangements. Fiscal policies, such as consumption and incomes taxes, and monetary policy that raises inflation can thereby influence societal structure as well as behavior within households.
JEL Classification: E60;
File format is application/pdf
Description: Full text
Provider: Federal Reserve Bank of Minneapolis
Part of Series: Economic Policy Paper
Publication Date: 2015-03-10