Savings and consumption decisions will be more efficient if households have the opportunity to borrow and save as they wish. This in turn would lead to more consumption, and therefore overall growth. The accuracy of this prediction is clearly borne out by developments in Sweden from 1980 to 2000, which is shown in Mårten Bjellerup’s dissertation Essays on Consumption: Aggregation, Asymmetry, and Asset Distributions. Greater opportunities to borrow money in various ways provided households with greater freedom to realize their plans and satisfy their needs, which helped create a higher rate of growth during the period.
One decisive factor for our being able to plan our lives as we wish is the possibility of borrowing and saving: education, cars, homes are just a few of the costly items that most people can afford only by borrowing money. A system where individuals have to save up for education or a home would most probably delay the realization of these plans, an involuntary delay. Since the late 1970s opportunities to borrow money have increased, including more comprehensive student loans and the deregulation of the mortgage market, all of which has made it easier for households to satisfy their needs and wishes.
Influential economic theory has long assumed that the distribution of income and wealth in society does not affect consumption in any substantial way, which is refuted by the findings in this dissertation. The results show that the group with negative net wealth, that is, households where debts are greater than assets, grew during the 1980-2000 period, and this, in turn, has led to a higher rate of growth. Furthermore, the findings show that the positive effect on consumption is probably due to the relatively high income of the group. In other words, this underlines the importance of studying the respective distribution of income and net wealth over time, and moreover separately, since types of assets have extremely different effects on consumption behavior.
Kerstin Brodén | alfa
Rutgers-led innovation could spur faster, cheaper, nano-based manufacturing
14.02.2018 | Rutgers University
New study from the University of Halle: How climate change alters plant growth
12.01.2018 | Martin-Luther-Universität Halle-Wittenberg
A newly developed laser technology has enabled physicists in the Laboratory for Attosecond Physics (jointly run by LMU Munich and the Max Planck Institute of Quantum Optics) to generate attosecond bursts of high-energy photons of unprecedented intensity. This has made it possible to observe the interaction of multiple photons in a single such pulse with electrons in the inner orbital shell of an atom.
In order to observe the ultrafast electron motion in the inner shells of atoms with short light pulses, the pulses must not only be ultrashort, but very...
A group of researchers led by Andrea Cavalleri at the Max Planck Institute for Structure and Dynamics of Matter (MPSD) in Hamburg has demonstrated a new method enabling precise measurements of the interatomic forces that hold crystalline solids together. The paper Probing the Interatomic Potential of Solids by Strong-Field Nonlinear Phononics, published online in Nature, explains how a terahertz-frequency laser pulse can drive very large deformations of the crystal.
By measuring the highly unusual atomic trajectories under extreme electromagnetic transients, the MPSD group could reconstruct how rigid the atomic bonds are...
Quantum computers may one day solve algorithmic problems which even the biggest supercomputers today can’t manage. But how do you test a quantum computer to...
For the first time, a team of researchers at the Max-Planck Institute (MPI) for Polymer Research in Mainz, Germany, has succeeded in making an integrated circuit (IC) from just a monolayer of a semiconducting polymer via a bottom-up, self-assembly approach.
In the self-assembly process, the semiconducting polymer arranges itself into an ordered monolayer in a transistor. The transistors are binary switches used...
Breakthrough provides a new concept of the design of molecular motors, sensors and electricity generators at nanoscale
Researchers from the Institute of Organic Chemistry and Biochemistry of the CAS (IOCB Prague), Institute of Physics of the CAS (IP CAS) and Palacký University...
15.02.2018 | Event News
13.02.2018 | Event News
12.02.2018 | Event News
23.02.2018 | Physics and Astronomy
23.02.2018 | Health and Medicine
23.02.2018 | Physics and Astronomy