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Journal Article
Income Inequality and Income-Class Consumption Patterns
This Commentary investigates whether there has been a growing divergence in the consumption of luxury and necessity goods across income classes. The analysis shows that while necessities represent a majority of the consumption basket for lower and middle income quintiles, their consumption of necessities in inflation-adjusted dollars has been declining in the face of higher prices of such goods and stagnant income growth. Higher income quintiles have seen increases in their consumption of luxuries, simultaneous with a decline in their consumption of necessities.
Journal Article
Are households saving enough for a secure retirement?
The recent rise in the personal saving rate has been interpreted as a sign that consumers are paying down their debt and repairing the damage done to their nest eggs. But a close analysis suggests that many people are falling short of saving what they will need to maintain their standard of living in retirement. A growing body of research in behavioral economics, a branch of economics that studies the choices people make at the individual level, offers explanations for why that is, as well as new approaches to the problem.
Journal Article
Income Growth and the Impact of Relative Price Changes on Age-based Consumption Patterns
This analysis shows that age-based consumption profiles have been affected by differences in the growth rates of real income and prices since the onset of the Great Recession in 2008. In particular, it shows that the recession caused changes in both the absolute level of households? consumption as well as the relative shares of income going to purchase necessities and luxuries, and that these changes differed by age group. It also shows that this shift occurred in spite of higher rates of price inflation for necessity goods relative to luxury items.