There has been significant work on the consumption patterns in macroeconomics. The key consumption theories have been the permanent-income and life-cycle hypotheses. Both theories tell us the same thing. In the permanent-income theory, a temporary change in income will not lead to a large change in consumption because consumers base consumption on what they view is a permanent change in their income. In the life cycle theory, consumption is smoothed over consumer's entire life so a small one-time change will not lead to n increase in consumption.
The impact of these theories is discussed clearly in the WSJ editorial, "The Stimulus Didn't Work" by some well-regarded economists. The tax rebates went out but there was no increase in consumption. Why spend the money if you are worried over the longer-run? why spend the money if you believe taxes may go up? The government spending may not have had a strong impact on savings either. The jump in GDP my have to do with private investment not consumption.
Economic theory works even if you don't want to believe it is true.
The impact of these theories is discussed clearly in the WSJ editorial, "The Stimulus Didn't Work" by some well-regarded economists. The tax rebates went out but there was no increase in consumption. Why spend the money if you are worried over the longer-run? why spend the money if you believe taxes may go up? The government spending may not have had a strong impact on savings either. The jump in GDP my have to do with private investment not consumption.
Economic theory works even if you don't want to believe it is true.
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