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
The 2020 CARES Act directed large cash payments to households. We analyze house-holds’ spending responses using high-frequency transaction data from a Fintech non-profit, exploring heterogeneity by income levels, recent income declines, and liquidity as well as linked survey responses about economic expectations. Households respond rapidly to the re-ceipt of stimulus payments, with spending increasing by $0.25-$0.40 per dollar of stimulus during the first weeks. Households with lower incomes, greater income drops, and lower lev-els of liquidity display stronger responses highlighting the importance of targeting. Liquidity plays the most important role, with no significant spending response for households with large checking account balances. Households that expect employment losses and ben...
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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