Economics at your fingertips  

Liquidity Constraint Tightness and Consumer Responses to Fiscal Stimulus Policy

Claus Kreiner, David Lassen () and Søren Leth-Petersen

American Economic Journal: Economic Policy, 2019, vol. 11, issue 1, 351-79

Abstract: The marginal interest rate is the price at which a household can access additional liquidity. Consumption theory posits that variation in marginal interest rates across consumers predicts differences in the propensity to spend a stimulus payment. This hypothesis is tested in the context of a Danish 2009 stimulus policy that transformed illiquid pension wealth into liquid wealth. Marginal interest rates are constructed from administrative records with account level information and merged with survey data measuring the spending response to the stimulus policy. The data reveal substantial variation in marginal interest rates across consumers, and these interest rates predict spending responses.

JEL-codes: D14 D15 E21 E43 E62 (search for similar items in EconPapers)
Date: 2019
Note: DOI: 10.1257/pol.20140313
References: Add references at CitEc
Citations: View citations in EconPapers (12) Track citations by RSS feed

Downloads: (external link) (application/pdf) ... 54Ci0qn6yB9VFZdJRtfZ (application/zip) ... 5cdShaixj-n1nUInTGTo (application/pdf) ... jt4I-qSNcdbCDgQjJxWV (application/zip)
Access to full text is restricted to AEA members and institutional subscribers.

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link:

Ordering information: This journal article can be ordered from

Access Statistics for this article

American Economic Journal: Economic Policy is currently edited by Matthew Shapiro

More articles in American Economic Journal: Economic Policy from American Economic Association Contact information at EDIRC.
Bibliographic data for series maintained by Michael P. Albert ().

Page updated 2022-08-18
Handle: RePEc:aea:aejpol:v:11:y:2019:i:1:p:351-79