This book provides an overview of the recent research on saving and consumption, a field in which substantial progress has been made over the last decade.Attempts by economists to understand saving and consumption patterns have generated some of the best science in economics. For more than fifty years, there has been serious empirical and theoretical activity, and data, theory, and policy have never been separated as has happened in many
branches of economics. Research has drawn microeconomists interested in household behaviour, as well as macroeconomists, for whom the behaviour of aggregate consumption has always occupied a central role
in explaining aggregate fluctuations. Econometricians have also made distinguished contributions, and there has been a steady flow of new methodologies by those working on saving and consumption, in time-series econometrics, as well as in the study of micro and panel data.A coherent account of these developments is presented here, emphasizing the interplay between micro and the macro, between studies of cross-section and panels, and those using aggregate time series data.
`There has been a veritable explosion of econometric work on consumption in recent years ... Angus Deaton has been behind some of it and is on top of all of it. There is no better way to get up to date.'
Alan S. Blinder, Princeton University
`The book does an impressive job of integrating the insights available from many sources, drawing on theory as well as econometric evidence, and micro as well as macro models. Understanding Consumption is lucid, intuitive, and eminently readable.'
Marjorie Flavin, University of Virginia
`Angus Deaton has written a splendid book synthesizing and evaluating this work. It will prove invaluable for researchers and students alike.'
N. Gregory Mankiw, Harvard University
`Understanding Consumption is a masterful exposition ... not only adding to our understanding of the real world, but also revealing the excitement of the intellectual chase.'
`This book derives from the Clarendon Lectures in Economics given by the author in May 1991. If the lectures were as compelling as the book, it is difficult to believe there was even standing room available by the final day! ... One of the many attractive features of this volume is the interplay between time-series analysis and individual data processes ... Deaton has not only provided an insightful analysis of what has been done but has also laid out a
tantalizing research agenda.'