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
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02.10.2017 | International Institute for Applied Systems Analysis (IIASA)
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University of Maryland researchers contribute to historic detection of gravitational waves and light created by event
On August 17, 2017, at 12:41:04 UTC, scientists made the first direct observation of a merger between two neutron stars--the dense, collapsed cores that remain...
Seven new papers describe the first-ever detection of light from a gravitational wave source. The event, caused by two neutron stars colliding and merging together, was dubbed GW170817 because it sent ripples through space-time that reached Earth on 2017 August 17. Around the world, hundreds of excited astronomers mobilized quickly and were able to observe the event using numerous telescopes, providing a wealth of new data.
Previous detections of gravitational waves have all involved the merger of two black holes, a feat that won the 2017 Nobel Prize in Physics earlier this month....
Material defects in end products can quickly result in failures in many areas of industry, and have a massive impact on the safe use of their products. This is why, in the field of quality assurance, intelligent, nondestructive sensor systems play a key role. They allow testing components and parts in a rapid and cost-efficient manner without destroying the actual product or changing its surface. Experts from the Fraunhofer IZFP in Saarbrücken will be presenting two exhibits at the Blechexpo in Stuttgart from 7–10 November 2017 that allow fast, reliable, and automated characterization of materials and detection of defects (Hall 5, Booth 5306).
When quality testing uses time-consuming destructive test methods, it can result in enormous costs due to damaging or destroying the products. And given that...
Using a new cooling technique MPQ scientists succeed at observing collisions in a dense beam of cold and slow dipolar molecules.
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Scientists from the Max Planck Institute of Quantum Optics, using high precision laser spectroscopy of atomic hydrogen, confirm the surprisingly small value of the proton radius determined from muonic hydrogen.
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17.10.2017 | Event News
10.10.2017 | Event News
10.10.2017 | Event News
18.10.2017 | Health and Medicine
18.10.2017 | Life Sciences
17.10.2017 | Life Sciences