Frank P. Stafford

Stafford says too early to say whether stock market declines will curtail Americans' spending

an In The Media Reference

"How to deal with the wealth effect's opposite as stocks fall" - USA Today. 2/9/2016.

The wealth effect is how spending varies with changes in perceived wealth. With recent drops in the world stock markets, consumers may respond to their perceived wealth declines with cutbacks in discretionary spending. Frank Stafford says it's still too soon to know: “The summer drop in the Standard and Poor’s 500-stock index and then the more recent drop may or may not be persistent enough to have a major effect." But, he cautions, "if the pattern persists or is notable, as in China, then spending will likely be curtailed."

Researchers:

Frank P. Stafford

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