Authors
Abstract
MPCs were directly elicited from a representative sample of UK adults in July 2020. Re- ported 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 uncertainty. Some respondents report that they would respond to a one-time income payment by transferring more to friends and family, others report they would see a decline in the payments received. Targeting payments to high-MPC individuals could be partly undone. Further, the aggregate MPC out of a stimulus payment need not equal the population-average MPC, even if all individuals receive the same payment.
Subjects
Link
https://www.iser.essex.ac.uk/research/publications/working-papers/iser/2020-14
Paper download