Journal Article

MPCs in an economic crisis: spending, saving and private transfers

Authors

Publication date

Sep 2021

Summary

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. 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.

Published in

Journal of Public Economics Plus

Volume

2:100005

DOI

https://doi.org/10.1016/j.pubecp.2021.100005

ISSN

16

Subjects

Households, Economics, Public Policy, Income Dynamics, Savings And Assets, Household Economics, Health, Finance, Economic Policy, and Covid 19

Notes

Open Access; Under a Creative Commons license

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