Webinar Series

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Pandemic

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May 2020

Income, Liquidity, and the Consumption Response to the 2020 Economic Stimulus Payments

Scott R. BAKER, Steffen MEYER, R.A. FARROKHNIA, Michaela PAGEL, Constantine YANNELIS
In response to the ongoing COVID-19 pandemic, the US government brought about a collection of fiscal stimulus measures: the 2020 CARES Act. We study direct payments to households starting in April 2020 using high-frequency transaction data. We explore the response of household spending to these stim...
Keywords: Consumption, COVID-19, Stimulus, MPC, Household Finance, transaction data
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Senior Fellows/Fellows

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Senior Fellows/Fellows

Income Inequality, Productivity, and International Trade

Wen-Tai HSU, Lin LU, Pierre M. PICARD
This paper discusses the effect of income inequality on selection and aggregate productivity in a general equilibrium model with non-homothetic preferences. It shows the existence of a negative relationship between the number and quantity of products consumed by an income group and the earnings of o...
Keywords: Income inequality, productivity, International trade
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Senior Fellows/Fellows

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Senior Fellows/Fellows

Income Distribution and Economic Development: Insights from Machine Learning

Pushan DUTT, Ilia TSETLIN
We draw upon recent advances that combine causal inferences with machine learning, to show that poverty is the key income distribution measure that matters for development outcomes. In a predictive framework, we first show that LASSO chooses only the headcount measure of poverty from 37 income distr...
Keywords: poverty, inequality, income distribution, economic development
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Annual Conference

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Household Finance

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May 2024

In victory or defeat: Consumption responses to wealth shocks

Alex IMAS, Tse-Chun LIN, Yan LUO, Xiaohuan WANG
Using a novel representative sample of digital payment and fund investment data, we observe a robust U-shaped relation between individual investors’ consumption and their financial wealth shocks. Contrary to the prediction of the wealth effect, individuals increase their consumption shortly after ...
Keywords: Wealth shocks, Consumption responses, Behavioral finance, Individual investors, Financial retail therapy, Digital payment data
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Senior Fellows/Fellows

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Senior Fellows/Fellows, Pandemic

Implications of Stochastic Transmission Rates for Managing Pandemic Risks

Neng WANG, Jinqiang YANG, Harrison HONG
We develop a model of pandemic risk management and firm valuation. We introduce aggregate transmission shocks into an epidemic model and link valuations to infections via an asset-pricing framework with vaccines. Infections lower earnings growth but firms can mitigate damages. We estimate a large ...
Keywords: COVID-19, stochastic epidemic model, transmission volatility, Risk management, stock valuation
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