TY - JOUR
T1 - Liquidity constraint tightness and consumer responses to fiscal stimulus policy
AU - Kreiner, Claus Thustrup
AU - Lassen, David Dreyer
AU - Leth-Petersen, SØren
PY - 2019/2/1
Y1 - 2019/2/1
N2 - The marginal interest rate is the price at which a household can access additional liquidity. Consumption theory posits that variation in marginal interest rates across consumers predicts differences in the propensity to spend a stimulus payment. This hypothesis is tested in the context of a Danish 2009 stimulus policy that transformed illiquid pension wealth into liquid wealth. Marginal interest rates are constructed from administrative records with account level information and merged with survey data measuring the spending response to the stimulus policy. The data reveal substantial variation in marginal interest rates across consumers, and these interest rates predict spending responses.
AB - The marginal interest rate is the price at which a household can access additional liquidity. Consumption theory posits that variation in marginal interest rates across consumers predicts differences in the propensity to spend a stimulus payment. This hypothesis is tested in the context of a Danish 2009 stimulus policy that transformed illiquid pension wealth into liquid wealth. Marginal interest rates are constructed from administrative records with account level information and merged with survey data measuring the spending response to the stimulus policy. The data reveal substantial variation in marginal interest rates across consumers, and these interest rates predict spending responses.
UR - http://www.scopus.com/inward/record.url?scp=85061927081&partnerID=8YFLogxK
U2 - 10.1257/pol.20140313
DO - 10.1257/pol.20140313
M3 - Journal article
AN - SCOPUS:85061927081
SN - 1945-7731
VL - 11
SP - 351
EP - 379
JO - American Economic Journal: Economic Policy
JF - American Economic Journal: Economic Policy
IS - 1
ER -