Distribution shifts and declines in autonomous consumption: A great recipe for a Great Recession.

摘要

The Great Recession has been drawing the attention of many due mainly to its global impact that has been considered very similar to the Great Depression. So have been the root causes. Among the competing explanations, the present study focuses on two of them that were the same factors---among others---to explain the root causes of the Great Depression: the dramatic shift in income distribution and the sudden drop in autonomous (or wealth-based) consumption. Accordingly the present study examines first, the role of income distribution shifts to demonstrate the fact that such a shift placed a significantly larger share of U.S. national income in the hands of the top one percent of income recipients at the same time as median real incomes were declining that in turn led to increased reliance on Mortgage Equity Withdrawal (MEW) and increases in debt ratios for middle income households. Second, it focuses on the role of wealth-based consumption by drawing attention to the similarities of the Great Depression and the Great Recession in regard to these two topics. The study concludes that although there are competing explanations for the Great Recession, the two factors are significant due to the fact that they have the potential to turn an ordinary recession into a depression or prolong it for a very long time.;Key words: Income distribution, autonomous (or wealth-based) consumption, Mortgage Equity Withdrawal (MEW), Great Depression, Great Recession.