This paper analyses the contraction in consumption (and increase in the propensity to save) of Italian households during the COVID-19 pandemic; the analysis is conducted at the macroeconomic and microeconomic level, using data from the Special Survey on Italian Households conducted by the Bank of Italy.
At the macroeconomic level, in 2020 the decline in aggregate consumption was much higher than estimated using the traditional determinants, due to the measures to contain the spread of the virus, the fear of infection, and greater uncertainty about the future. A microeconometric analysis shows that apart from any economic reasons, which predominate in households whose head is unemployed, the fear of infection and uncertainty play an important role, especially for self-employed workers.
Forthcoming in: International Journal of Central Banking
