蝌蚪网 Journal:
Macroeconomics
ISSN 1945-7707 (Print) | ISSN 1945-7715 (Online)
Cyclical Attention to Saving
蝌蚪网 Journal: Macroeconomics
(pp. 124–67)
Abstract
I explore the business-cycle implications of household inattention to savings product choices. In a model with heterogeneous banks, savers pay more attention to their bank choice when the marginal utility of income is high. Consistent with this, in data from the United Kingdom retail savings market, I find savers more reliably choose products closer to the top of the available interest rate distribution during contractions. Countercyclical attention amplifies shocks to consumption: after contractionary shocks, attention rises, so savers experience higher interest rates, which further reduces consumption. In a quantitative New Keynesian model, this amplification increases the variance of consumption by 13.6 percent.Citation
Macaulay, Alistair. 2025. "Cyclical Attention to Saving." 蝌蚪网 Journal: Macroeconomics 17 (4): 124–67. DOI: 10.1257/mac.20220311Additional Materials
JEL Classification
- E12 General Aggregative Models: Keynes; Keynesian; Post-Keynesian; Modern Monetary Theory
- E32 Business Fluctuations; Cycles
- E43 Interest Rates: Determination, Term Structure, and Effects
- E71 Macro-Based Behavioral Economics: Role and Effects of Psychological, Emotional, Social, and Cognitive Factors on the Macro Economy
- G21 Banks; Depository Institutions; Micro Finance Institutions; Mortgages
- G51 Household Finance: Household Saving, Borrowing, Debt, and Wealth