Full Citation
Title: Measuring Long-Run Consumption
Citation Type: Miscellaneous
Publication Year: 2009
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Abstract: This paper documents a relationship between household demographics and substitution between homeand market production and proposes it as an explanation of low frequency movements in consumptionexpenditures relative to GDP, in particular the secular increase in consumption?s share in GDP since the1980s. A growth model with an endogenously evolving allocation between home and market production isshown also to imply a drift in the share of market consumption to market output. Data from the ConsumerExpenditure Survey and other sources con?rm these eects in the cross-section and over the period from1984-2004, and a quantitative exercise matches them up with demographic changes over the entire 20thcentury as documented in Census data. The implication is that periods in which hours of work per capitaincrease involve arti?cial increases in measured consumption, and an upward drift in the share of consumptionexpenditures in GDP. In addition, ?true?consumption exhibits a closer link to long-term productivity trends.
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Authors: Kahn, James
Publisher: Wharton School, University of Pennsylvania
Data Collections: IPUMS USA
Topics: Other
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