Date: 2021
Type: Working Paper
MPCs through COVID : spending, saving and private transfers
Working Paper, IFS Working Paper, 2021/03
CROSSLEY, Thomas F., FISHER, Paul, LEVELL, Peter, LOW, Hamish, MPCs through COVID : spending, saving and private transfers, IFS Working Paper, 2021/03 - https://hdl.handle.net/1814/73108
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 low, 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 un-certainty. Further, the fraction of respondents that report they would change their transfer payments to or from family and friends is almost as large as the fraction that report they would increase their spending. This means that targeting direct fiscal stimulus payments to high-MPC individuals could be partly undone, and that the aggregate MPC out of a stimulus payment need not equal the population-average MPC.
Additional information:
Published online: 05 February 2021
Cadmus permanent link: https://hdl.handle.net/1814/73108
Full-text via DOI: 10.1920/wp.ifs.2021.321
External link: https://ifs.org.uk/publications/15297
Series/Number: IFS Working Paper; 2021/03
Publisher: Institute for Fiscal Studies
Keyword(s): Spending MPC Crowding out COVID-19
Initial version: https://hdl.handle.net/1814/73109; https://hdl.handle.net/1814/73110