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The implications of savings accumulated during the pandemic for the global economic outlook

Author

Listed:
  • Attinasi, Maria Grazia
  • Bobasu, Alina
  • Manu, Ana-Simona

Abstract

The coronavirus (COVID-19) pandemic has led to the accumulation of a large stock of household savings across advanced economies. Owing to their large size, the savings accumulated since early 2020 could significantly influence the post-pandemic recovery path. The central question is whether households will spend heavily once pandemic-related restrictions are lifted and consumer confidence returns, or whether other motives (e.g. precautionary, deleveraging) will keep households from spending their accumulated excess savings. This box reviews the main economic arguments supporting the hypothesis that any reduction in the accumulated stock of savings is likely to be limited in the medium term. However, given the considerable uncertainty surrounding these arguments, it also illustrates two alternative scenarios for the stock of the accumulated savings (a “cut-back” scenario and a “build-up” scenario) and assesses their possible implications for the global economic outlook. JEL Classification: F32, F41

Suggested Citation

  • Attinasi, Maria Grazia & Bobasu, Alina & Manu, Ana-Simona, 2021. "The implications of savings accumulated during the pandemic for the global economic outlook," Economic Bulletin Boxes, European Central Bank, vol. 5.
  • Handle: RePEc:ecb:ecbbox:2021:0005:1
    Note: 930374
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    Citations

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    Cited by:

    1. Jacques Sapir, 2023. "The Macroeconomic Impact of the New Geopolitical Deal on the French Economy," Studies on Russian Economic Development, Springer, vol. 34(3), pages 308-319, June.
    2. Luigi Infante & Francesca Lilla & Francesco Vercelli, 2023. "The effects of the pandemic on households' financial savings: a Bayesian structural VAR analysis," Temi di discussione (Economic working papers) 1421, Bank of Italy, Economic Research and International Relations Area.
    3. Mariella Nenova, 2022. "Households’ Consumption Pattern and Saving – Evidence for the First Year of the Covid-19 Pandemic in Bulgaria," Economic Studies journal, Bulgarian Academy of Sciences - Economic Research Institute, issue 6, pages 3-22.
    4. Liviu Voinea & Prakash Loungani, 2022. "Excess Savings Are Recession-Specific and Compensatory: Evidence From the US," Intereconomics: Review of European Economic Policy, Springer;ZBW - Leibniz Information Centre for Economics;Centre for European Policy Studies (CEPS), vol. 57(4), pages 233-237, July.

    More about this item

    Keywords

    global growth; Household savings; pandemic; scenarios;
    All these keywords.

    JEL classification:

    • F32 - International Economics - - International Finance - - - Current Account Adjustment; Short-term Capital Movements
    • F41 - International Economics - - Macroeconomic Aspects of International Trade and Finance - - - Open Economy Macroeconomics

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