Journal Article

MPCs in an economic crisis: spending, saving and private transfers

By Thomas F. Crossley, Paul Fisher, Peter Levell and Hamish Low

Publication details

Publication date
Published in
Journal of Public Economics Plus
Volume
2:100005
Publisher
Elsevier B.V.
DOI
https://doi.org/10.1016/j.pubecp.2021.100005
ISSN
26665514

Summary

MPCs were directly elicited from a representative sample of UK adults in July 2020 using receipt of a hypothetical unanticipated, one-time income payment. Reported MPCs are modest, around 11% on average. They are higher, but still modest, for individuals in households with high current needs. Significant fractions of respondents report they would use a windfall to pay down debt, or that they would change their transfer payments to or from family and friends. The latter means that the aggregate MPC out of a stimulus payment need not equal the population-average MPC.

Notes

Open Access

Under a Creative Commons license

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