{
  "title": "After the Crisis: Lower Consumption Growth But Narrower Global Imbalances?",
  "publication": "IMF Working Papers, January 1, 2010",
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  "summary": "We estimate consumption dynamics in the G-7 economies, paying particular attention to the possibility of precautionary behavior in the face of uncertainty. We find that in the short run, continued income uncertainty will significantly dampen consumption growth.",
  "sections": [
    {
      "heading": "Summary findings",
      "content": "- The paper estimates consumption dynamics in the G-7 economies, emphasizing the possibility of precautionary behavior in the face of uncertainty.\n- In the short run, continued income uncertainty will significantly dampen consumption growth.\n- Consumption in the G-7 economies is unlikely to be the engine that revives global growth."
    },
    {
      "heading": "Analysis of drivers and heterogeneity across G-7",
      "content": "- Precautionary behavior driven by income uncertainty is a central mechanism reducing consumption growth.\n- Differences in the pace and timing of consumption moderation across G-7 countries matter for global outcomes.\n- The U.S. experienced a sharper rise in unemployment and, perhaps, more widespread loss of financial wealth than elsewhere in the G-7:\n  - The relative rise of the U.S. savings rate is helping narrow global imbalances.\n  - With a likely earlier recovery in the U.S., this narrowing could be short-lived.\n- Long-term sources of imbalances include:\n  - Differences in economic and financial volatility.\n  - Differences in demographic structures.\n- These long-term differences have been important sources of global imbalances and could soon reassert their prominence."
    },
    {
      "heading": "Policy-relevant implications",
      "content": "- Short-run: Continued income uncertainty implies weaker consumption-led global growth, reducing the effectiveness of relying on household consumption as the primary engine of recovery.\n- Medium-run: Country-specific trajectories (especially a faster U.S. recovery) can reverse temporary narrowing of global imbalances.\n- Long-run: Structural factors—economic/financial volatility and demographics—require policy attention because they can reestablish imbalances even after short-term adjustments.\n\n---\n\n Content in this bundle\n\n- wp1011\n  - wp1011 (Markdown version){rel=\"alternate\" type=\"text/markdown\"}\n  - wp1011 (PDF){rel=\"external\" type=\"application/pdf\"}\n\n---\n\nSource: https://www.imf.org/en/publications/wp/issues/2016/12/31/after-the-crisis-lower-consumption-growth-but-narrower-global-imbalances-23465"
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    "Authors: Franziska L Ohnsorge, Ashoka Mody",
    "Published: January 1, 2010",
    "Series: IMF Working Papers",
    "DOI: https://doi.org/10.5089/9781451961966.001",
    "The paper estimates consumption dynamics in the G-7 economies, emphasizing the possibility of precautionary behavior in the face of uncertainty.",
    "In the short run, continued income uncertainty will significantly dampen consumption growth.",
    "Consumption in the G-7 economies is unlikely to be the engine that revives global growth.",
    "Precautionary behavior driven by income uncertainty is a central mechanism reducing consumption growth.",
    "Differences in the pace and timing of consumption moderation across G-7 countries matter for global outcomes.",
    "The U.S. experienced a sharper rise in unemployment and, perhaps, more widespread loss of financial wealth than elsewhere in the G-7:",
    "Long-term sources of imbalances include:",
    "These long-term differences have been important sources of global imbalances and could soon reassert their prominence.",
    "Short-run: Continued income uncertainty implies weaker consumption-led global growth, reducing the effectiveness of relying on household consumption as the primary engine of recovery.",
    "Medium-run: Country-specific trajectories (especially a faster U.S. recovery) can reverse temporary narrowing of global imbalances.",
    "Long-run: Structural factors—economic/financial volatility and demographics—require policy attention because they can reestablish imbalances even after short-term adjustments.",
    "**_wp1011**"
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