5  See Gary Gorton and George Pennacchi (1990), “Financial Intermediaries and Liquidity Creation,” Journal of Finance, vol. 45 (March), pp. 49–71. Demand deposits may also represent a form of insurance against liquidity shocks, as argued in Douglas W. Diamond and Philip H. Dybvig (1983), “Bank Runs, Deposit Insurance, and Liquidity,” Journal of Political Economy, vol. 91 (June), pp. 401–19.
The slowing in the appreciation of house prices will likely reduce the impetus to consumer spending from this source, while recent increases in stock market values, declines in energy prices and strong employment and wage growth should spur consumption. In the business sector, spending on nonresidential construction has been particularly robust.