NATIONAL BUREAU OF ECONOMIC RESEARCH
NATIONAL BUREAU OF ECONOMIC RESEARCH
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R. A. Farrokhnia

Columbia Graduate School of Business
3022 Broadway
New York, NY 10027

E-Mail: EmailAddress: hidden: you can email any NBER-related person as first underscore last at nber dot org
Institutional Affiliation: Columbia Graduate School of Business

NBER Working Papers and Publications

May 2020Income, Liquidity, and the Consumption Response to the 2020 Economic Stimulus Payments
with Scott R. Baker, Steffen Meyer, Michaela Pagel, Constantine Yannelis: w27097
In response to the ongoing COVID-19 pandemic, the US government brought about a collection of fiscal stimulus measures: the 2020 CARES Act. Among other provisions, this Act directed cash payments to households. We analyze households’ spending responses using high-frequency transaction data. We also explore heterogeneity by income levels, recent income declines, and liquidity. We find that households respond rapidly to receipt of stimulus payments, with spending increasing by $0.25-$0.35 per dollar of stimulus during the first 10 days. Households with lower incomes, greater income drops, and lower levels of liquidity display stronger responses. Liquidity plays the most important role, with no observed spending response for households with high levels of bank account balances. Relative to th...
April 2020How Does Household Spending Respond to an Epidemic? Consumption During the 2020 COVID-19 Pandemic
with Scott R. Baker, Steffen Meyer, Michaela Pagel, Constantine Yannelis: w26949
We explore how household consumption responds to epidemics, utilizing transaction-level household financial data to investigate the impact of the COVID-19 virus. As the number of cases grew, households began to radically alter their typical spending across a number of major categories. Initially spending increased sharply, particularly in retail, credit card spending and food items. This was followed by a sharp decrease in overall spending. Households responded most strongly in states with shelter-in-place orders in place by March 29th. We explore heterogeneity across partisan affiliation, demographics and income. Greater levels of social distancing are associated with drops in spending, particularly in restaurants and retail.
 
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