MPCs in an economic crisis : spending, saving and private transfers
Journal of public economics plus, 2021, OnlineFirst
CROSSLEY, Thomas F., FISHER, Paul, LEVELL, Peter, LOWE, Hamish, MPCs in an economic crisis : spending, saving and private transfers, Journal of public economics plus, 2021, OnlineFirst - https://hdl.handle.net/1814/72358
Retrieved from Cadmus, EUI Research Repository
MPCs were directly elicited from a representative sample of UK adults in July 2020 using receipt of a hypothetical unanticipated, one-time income payment. Reported MPCs are modest, around 11% on average. They are higher, but still modest, for individuals in households with high current needs. These low MPCs may be a consequence of the prevailing economic uncertainty. Significant fractions of respondents report they would use a windfall to pay down debt, or that they would change their transfer payments to or from family and friends. The latter means that the aggregate MPC out of a stimulus payment need not equal the population-average MPC.
First published online: 4 September 2021
Cadmus permanent link: https://hdl.handle.net/1814/72358
Full-text via DOI: 10.1016/j.pubecp.2021.100005
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