Income, Liquidity, and the Consumption Response to the 2020 Economic Stimulus Payments*
Review of Finance
; 2023.
Article
in English
| Web of Science | ID: covidwho-2321832
ABSTRACT
The 2020 CARES Act directed large cash payments to households. We analyze households' spending responses using data from a Fintech nonprofit, exploring heterogeneity by income, recent income declines, and liquidity as well as linked survey responses about economic expectations. Households respond rapidly to payments, with spending increasing by about $0.14 per dollar during the first week and plateauing around $0.25-$0.30 over 3 months. In contrast to previous stimulus programs, we see little response of durables spending. Households with lower incomes, greater income declines, and less liquidity display stronger responses whereas households that expect employment losses and benefit cuts display weaker responses.
Full text:
Available
Collection:
Databases of international organizations
Database:
Web of Science
Type of study:
Observational study
Language:
English
Journal:
Review of Finance
Year:
2023
Document Type:
Article
Similar
MEDLINE
...
LILACS
LIS