Representing Consumption and Saving without a Representative Consumer

Christopher D. Carroll

Chapter in NBER book Measuring Economic Sustainability and Progress (2014), Dale W. Jorgenson, J. Steven Landefeld, and Paul Schreyer, editors (p. 115 - 134)
Conference held August 6–8, 2012
Published in September 2014 by University of Chicago Press
© 2014 by the National Bureau of Economic Research
in NBER Book Series Studies in Income and Wealth

The Great Recession confirmed a bedrock principle of modern consumption theory: It is impossible to explain aggregate spending behavior without knowledge of the underlying microeconomic distribution of circumstances and choices across households. National accounting frameworks augmented by "bottom up" measures that both (a) capture the microeconomic heterogeneity (in expenditures, income, assets, debt, and beliefs) in the population and (b) sum up to statistics that have a recognizable relationship to the aggregate totals that are already reasonably well measured could help researchers acquire such knowledge.

Disclosures

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