Fiscal multipliers, monetary efficacy, and hand-to-mouth households

Fei Guo, Isabel Kit-Ming Yan, Tao Chen and Chun-Tien Hu

Journal of International Money and Finance, 2023, vol. 130, issue C

Abstract: The effectiveness of fiscal and monetary policy has been found to exhibit large heterogeneity across countries, and it hinges heavily on households’ marginal propensity to consume (MPC) in response to the policy shocks. This paper examines the role of households’ liquidity, saving, and credit constraints as microfactors that underpin households’ MPC and hence affect the macro level fiscal and monetary policy effectiveness.

Keywords: Liquidity Constraint; Saving Constraint; Fiscal Multiplier; Monetary Efficacy; Hand-to-Mouth Households (search for similar items in EconPapers)
JEL-codes: E21 E51 E62 H20 (search for similar items in EconPapers)
Date: 2023
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Citations: View citations in EconPapers (5)

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Persistent link: https://EconPapers.repec.org/RePEc:eee:jimfin:v:130:y:2023:i:c:s0261560622001462

DOI: 10.1016/j.jimonfin.2022.102743

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