Working Paper: CEPR ID: DP15474
Authors: Camille Landais; David Bounie; Youssouf Camara; Etienne Fize; John Galbraith; Chloe Lavest; Tatiana Pazem; Baptiste Savatier
Abstract: We use anonymised transaction and bank data from France to document theevolution of consumption and savings dynamics since the onset of the pandemic.We find that consumption has dropped very severely during the nation-wide lockdownbut experienced a strong and steady rebound during the Summer, beforefaltering in late September. This drop in consumption was met with a significantincrease in aggregate households’ net financial wealth. This excess savingsis extremely heterogenous across the income distribution: 50% of excess wealthaccrued to the top decile. Households in the bottom decile of the income distributionexperienced a severe decrease in consumption, a decrease in savings andan increase in debt. We estimate marginal propensities to consume and show thattheir magnitude is large, especially at the bottom of the income and liquidity distributions.
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Edges that are evidenced by causal inference methods are in orange, and the rest are in light blue.
| Cause | Effect |
|---|---|
| Lockdown policies (E65) | Consumption levels (E21) |
| Decreased consumption during the lockdown (D12) | Increase in aggregate households' net financial wealth (G59) |
| Welfare transfer (I38) | Marginal propensities to consume (E21) |
| Health risk perceptions (I12) | Consumption dynamics (E21) |
| Crisis (H12) | Wealth inequality (D31) |