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Official balance‐sheet estimates for the household sector are not currently available in South Africa, yet, with the country's well‐developed financial sector and deep capital markets, asset market channels are likely to be important determinants of aggregate consumer spending and saving, consumer demand for credit, and their broad money holdings. This study produces estimates of household balance sheets for South Africa. The study draws, where feasible, on best practice from the Office of National Statistics of the UK and assesses the quality of the data sources and suggests areas where additional surveys or improvements in data‐collection procedures would be helpful further to improve the quality of the balance‐sheet estimates. Furthermore, quarterly balance‐sheet measures to 2005 are provided, and linked to quarterly measures. The main balance‐sheet categories are liquid assets, household debt, and various categories of illiquid financial and tangible assets, including pension wealth, directly held shares and bonds, and housing. Revised debt estimates and new estimates of tangible assets for households and unincorporated businesses are provided. The study describes the trends of the estimates of the household sector's balance sheets and of total net wealth. The paucity of data for developing and emerging market countries is illustrated by means of a survey, and lessons are drawn from the South African research for the compilation of household‐sector balance sheets.

This chapter presents a simple variant of an economic model with environmental pollution and productive public capital. It considers a decentralized economy with a household sector, a productive sector, and the government. This model is analyzed assuming a logarithmic utility function.

This chapter presents evidence that free innovation is a very substantial phenomenon with respect to the development of products consumed within the household sector. Today, tens of millions of consumers annually spend tens of billions of dollars creating and modifying products to better serve their own needs. In fact, aggregate household sector product development expenditures rival the scale of business sector expenditures by producers developing products for consumers. The chapter then shows how more than 90 percent of the developers of product innovations in the household sector meet both of the criteria for free innovation specified in the previous chapter. Finally, the chapter explores the nature of transaction-free self-rewards central to the viability of free innovation, and discusses why it can make economic sense for free innovators to reveal their innovations for free.

Researchers use different types of household balance sheet data to study different aspects of lifecycle saving and wealth accumulation behavior. Macro data from the Flow of Funds Accounts (FFA) are produced at a quarterly frequency and are available in a timely manner, but they can only be used to study the behavior of the household sector as a whole. Micro data from the Survey of Consumer Finances (SCF) are available every three years and only with a lag, but they can be used to address questions that involve differences in behavior over time and across various types of households. Despite the very different approaches to estimating household net worth, the two data sets show the same general patterns of wealth changes over the past twenty-five years. Areas where the FFA and SCF diverge in aggregate levels—in categories such as owner-occupied housing, non-corporate equity, and credit cards—may be explained by methodological differences in the production of the data. Those differences do not fundamentally alter one’s perception of household wealth dynamics in the period leading up to and following the Great Recession.

This chapter describes the crisis that unfolded in the late 2000s, and how it changed the world's political economy. The crisis had its origins, like many others, on the edges of capitalism, in the household sector and land, and in the most dramatically unbalanced parts of the system, before spreading into every other part, freezing the flow of credit in the banks, and then precipitating a cascade of collapses. In retrospect, scholars can now see that the late 1990s brought a historic shift of surpluses away from production and toward finance, which, like any excess of predation, inevitably harmed the vitality of the system being preyed on.

This chapter introduces the concept of “free innovation,” which entails innovations developed and given away by consumers as a “free good,” with resulting improvements in social welfare. It illustrates how free innovation works within the broader scope of national economic development and how free innovation works vis-à-vis the traditional producer innovation paradigm. The chapter compares and contrasts free innovation and the producer innovation paradigm, in the process illustrating how the creation of a free innovation paradigm can both challenge and complement the traditional producer innovation paradigm. The free innovation paradigm here is meant to guide emerging research into free innovation practices and policies through the use of an underlying unified structure. The chapter then closes with a summary of the free innovation paradigm theory as well as some related concepts.

This chapter looks at how both free innovators and commercial project sponsors are increasingly competing to “tighten the loop” between themselves and free innovators to obtain a larger share of voluntary and unpaid design efforts. Crowdsourcing calls by both free innovators and producers asking for assistance on innovation projects from the household sector are on the rise. Producers are also learning to support free innovators, seeking to channel their work into privately profitable directions. Hence, the chapter explains how producers are learning to support free innovators in ways that benefit themselves but not their rivals. It then explores how lower-cost pathways to commercialization are becoming available to household sector innovators. Finally, the chapter discusses how, via crowdsourcing, free innovators and producers are both learning to more effectively recruit free innovation labor from the household sector.

This chapter suggests several ways to make progress in free innovation research, policymaking, and practice. It sets expectations for the role the free innovation paradigm might play in these efforts; compares and contrasts the research lenses offered by free innovation, user innovation, peer production, and open innovation; and proposes steps to improve the measurement of free innovation. Next the chapter suggests research steps for incorporating free innovation into innovation theory and policymaking. Finally, this chapter looks at how the free innovation paradigm can help us to understand the economics of household sector creative activities even beyond innovation, such as “user-generated content” ranging from fan fiction to contributions to Wikipedia.

This chapter examines the effect of interest rates on consumption in Japan and explains why monetary transmission via Japan’s household sector is significantly different from that operating in the United States and other industrial countries. It presents an empirical analysis of Japanese consumption and household saving behavior, and explores the role of the household sector in the monetary transmission mechanism in Japan. Using models for aggregate consumption based more on the solved out consumption function approach than the Euler equation approach, the chapter looks at income growth and income uncertainty, along with the role of housing wealth, demography, and residential land prices.

This chapter shows that free innovation extends well beyond product innovation—the type of innovation focused upon by almost all studies of household sector innovation to date. It reviews field-specific empirical studies that find significant levels of free innovation present in services, processes, marketing methods, and new organizational methods. The chapter also discusses illustrative examples of the sources of innovation across five innovation categories used in official Organisation for Economic Co-operation and Development (OECD) government statistics. Thus, the chapter argues that the scope of free innovation in the household sector is indeed broad—and perhaps as broad as that of producer innovation with respect to products, services, and processes of interest to consumers.