See April 2002 IMF World Economic Outlook pp: 74-85 "Is Wealth Increasingly Driving Consumption?" (available on the Internet).

1. What are the three main components of household wealth in G-7 economies? How have these components changed over time?

2. How does wealth affect consumption? Why do the differences in the type of wealth and financial system matter in determining the impact of wealth on consumption?

3. Compare and contrast the empirical findings regarding wealth effects among different countries in the G-7.