February 5-7, 2013 | St. Louis Mo.
February 7, 2013
Breakfast Keynote Address
Introduction: James Bullard (3:30)
Keynote: Governor Jeremy Stein (46:29)
Keynote Q&A (11:22)
Session Four – Household Balance Sheets: Deleveraging and Economic Growth
- What's Driving Deleveraging? Evidence from the 2007-2009 Survey of Consumer Finances
Karen Dynan and Wendy Edelberg (22:08)
Session Four, Part 1 Discussant: John Krainer (20:16)
Session Four, Part 1 Q&A (14:47)
- Household Balance Sheets, Consumption, and the Economic Slump
Atif R. Mian, Kamalesh Rao and Amir Sufi (21:57)
Session Four, Part 2 Discussant: Brian Melzer (18:51)
Session Four, Part 2 Q&A (15:44)
Session Four Moderator: Daniel Davis (2:14)
Closing Plenary – Facilitated Panel Discussion: Household Balance Sheets and Economic Growth
Panelist: David Buchholz (10:24)
Panelist: Steven Fazzari (11:41)
Panelist: Deniz Igan (12:13)
Discussant: Barry Cynamon (20:03)
Panel Discussion Q&A (27:29)
Ray Boshara (2:09)
Below is a full transcript of this video presentation. It has not been edited or reviewed for accuracy or readability.
Christopher Waller: Well, good evening, and welcome. I want to thank everybody for coming to the conference. My name’s Chris Waller. I’m the Research Director here at the Federal Reserve Bank of St. Louis. I always tell people being a research director at a fed is a bit of an oxymoron. You never have time to do any research, and directing economists doing research is like herding cats. They don’t listen to you anyway.
So anyway, it’s my honor to introduce our speaker tonight. Professor Christopher Carroll from Johns Hopkins University. His bio was handed out this afternoon, and contains all of the relevant mentions of his education, prestigious awards, affiliation, professional activities, appointments. So I won’t read it here. I couldn’t write it better than it was in the bio.
So what I will do is talk a little bit for a minute or so about the research area Professor Carroll is known for, which is the behavior of household consumption and saving, particularly under income uncertainty. As you can see, by the title of the talk, uncertainty involves trying to make some forecast or expectations about the future in terms of making saving and consumption decisions today. So Professor Carroll’s an expert on the topic, and he’s got obviously an excellent choice to speak on this topic at this conference.
Now, I just want to take a second and understanding consumption and saving is so important in economics that we’ve given two Nobel prizes for it. In economics, the fundamental result is that agents save to smooth consumption when facing unpredictable swings in income. If your income’s high today, and you know it potentially is going to be lower tomorrow, you save some income so that you can finance and do that. Personally, I believe this decision that we’re going to talk about is the most important economic decision that we can imagine. We’ve observed this problem throughout history, and every culture of humankind has had to deal with this problem. I also like to tell my students it’s not just about humans. Every living organism has this problem. There’s food today. They got to figure out a way to survive next period when the food’s gone. So it’s not just humans. That’s how basic this issue is.
So Professor Carroll’s work has shown how our standard understandings of consumption saving can be dramatically altered by uncertainty about the path of future income. Our ability to finance consumptions, spending in the face of borrowing constraints, and of course the issue of how do you form expectations. So with that, I’ll turn it over to Professor Carroll.