IDEAS home Printed from https://ideas.repec.org/p/cbi/ecolet/4-el-21.html
   My bibliography  Save this paper

Saving during the pandemic: Waiting out the storm?

Author

Listed:
  • Lydon, Reamonn

    (Central Bank of Ireland)

  • McIndoe-Calder, Tara

    (Central Bank of Ireland)

Abstract

Spending after the pandemic will be influenced by what households decide to do with their ‘excess pandemic savings’. Higher income households likely saved more. We estimate that more than half could be in the top 30 per cent of households by income. As these savings are more akin to deferred spending than precautionary savings, a relatively high share may be spent in future. If half of excess pandemic savings accumulated to date are spent, it could add up to 5 per cent (or €5 billion) to consumer spending over time. Savings could also be reinvested, including to purchase owner-occupied housing and fund home improvements. Spending could turn out to be considerably higher, if there is a swift recovery from the pandemic. Conversely, a slower recovery, with a weaker jobs and income outlook, could encourage households to hold on to more savings for longer.

Suggested Citation

  • Lydon, Reamonn & McIndoe-Calder, Tara, 2021. "Saving during the pandemic: Waiting out the storm?," Economic Letters 4/EL/21, Central Bank of Ireland.
    • Handle: RePEc:cbi:ecolet:4/el/21
    as

    Download full text from publisher

    File URL: https://www.centralbank.ie/docs/default-source/publications/economic-letters/vol-2021-no-4-saving-during-the-pandemic-waiting-out-the-storm-reamonn-lydon-and-tara-mcindoe-calder.pdf?sfvrsn=7
    Download Restriction: no
    ---><---

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. Barrett, Michelle & Farrell, Niall & Roantree, Barra, 2022. "Energy poverty and deprivation in Ireland," Research Series, Economic and Social Research Institute (ESRI), number RS144.
    2. Ren, He & Zheng, Yi, 2023. "COVID-19 vaccination and household savings: An economic recovery channel," Finance Research Letters, Elsevier, vol. 54(C).
    3. Timmons, Shane & Robertson, Deirdre & Lunn, Pete, 2022. "Combining nudges and boosts to increase precautionary saving: A large-scale field experiment," Papers WP722, Economic and Social Research Institute (ESRI).
    4. Boyd, Laura & Keenan, Enda & McIndoe-Calder, Tara, 2023. "Earnings growth under high inflation," Quarterly Bulletin Articles, Central Bank of Ireland, pages 89-123, September.

    More about this item

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:cbi:ecolet:4/el/21. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    We have no bibliographic references for this item. You can help adding them by using this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Fiona Farrelly (email available below). General contact details of provider: https://edirc.repec.org/data/cbigvie.html .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.