We estimate the unconditional distribution of the marginal propensity to consume (MPC)
using clustering regression applied to the 2008 economic stimulus payments. By deviating …

This paper studies how and why households adjust their spending, saving, and borrowing in
response to transitory income shocks. We leverage new large-scale survey data to first …

Abstract Constrained,“hand-to-mouth,” households with zero liquid wealth are a central
building block of modern heterogeneous-agent consumption models. We document …

We introduce a new quantitative model of household expenditure shocks to rationalize the
common anecdote of a low-income and low-liquidity household that uses additional income …

We examine the impact of financial education on credit decisions during COVID-19. The
pandemic presented economic challenges, but policy responses provided opportunities for …

A variety of distortions, such as financial constraints and behavioral biases, have been
proposed to explain deviations from canonical consumption-savings models. We develop a …

Do women respond differently to income shocks than men? We use questions from the NY
Fed Survey of Consumer Expectations that ask how women and men would adjust to an …

Existing and well-functioning e-commerce markets and electronic payment systems improve
pandemic performance by providing an effective layer of protection against contagious …

Following Campbell and Mankiw (1989), the two-agent model, combining hand-to-mouth
and permanent-income households, has become a popular alternative to the representative …

The marginal propensity to consume (MPC) is a central object in economics that is key to
understand the transmission of shocks. Recent empirical findings challenge the standard …