Author (Person) | Albuquerque, Bruno, Green, Georgina |
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Publisher | International Monetary Fund |
Series Title | IMF Working Papers |
Series Details | WP/22/47, Number 47 |
Publication Date | March 2022 |
Content Type | Research Paper |
Summary: We study how household concerns about their future financial situation may affect the marginal propensity to consume (MPC) during the COVID-19 pandemic. We use a representative survey of UK households to compute the MPC from a hypothetical transfer of £500. We find that household expectations play a key role in determining differences in MPCs across households: households concerned about not being able to make ends meet have a 20% higher MPC than other households. Our findings suggest that policies targeted to vulnerable and financially distressed households may prove more effective in stimulating demand than providing stimulus payments to all households. |
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Source Link |
Link to Main Source
https://www.imf.org/en/Publications/WP/Issues/2022/03/04/Financial-Concerns-and-the-Marginal-Propensity-to-Consume-in-COVID-Times-Evidence-from-UK-513879
Alternative sources
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Subject Categories | Economic and Financial Affairs |
Keywords | COVID-19 (Coronavirus) |
Countries / Regions | United Kingdom |