The Effect of Hurricane Matthew on Consumer Spending
In this note, we take a step forward in this regard using a new dataset of transaction volumes to examine how consumers reacted to Hurricane Matthew, which struck the East Coast in October 2016.
Check in the mail or more in the paycheck: does the effectiveness of fiscal stimulus depend on how it is delivered?
Recent fiscal policies have aimed to stimulate household spending. In 2008, most households received one-time economic stimulus payments. In 2009, most working households received the Making Work Pay tax credit in the form of reduced withholding; other households, mainly retirees, received one-time payments. This paper quantifies the spending response to these different policies and examines whether the spending response differed according to whether the stimulus was delivered as a one-time payment or as a flow of payments in the form of reduced withholding. Based on responses from a ...
"Limited Attention" and Inflation Expectations of Households
In this note, we use the household-level data in the University of Michigan's Surveys of Consumers, including respondents' own changes in expectations, to document new signs that households pay limited attention to inflation developments.
Report on the Economic Well-Being of U.S. Households in 2018
This report describes the responses to the sixth annual Survey of Household Economics and Decisionmaking (SHED). The goal of the survey is to share the wide range of financial challenges and opportunities facing individuals and households in the United States.1 For many, the findings are positive; however, areas of distress and fragility remain. The survey also reveals how households view their own financial lives and the many decisions they face, from education to retirement.
From Transactions Data to Economic Statistics: Constructing Real-time, High-frequency, Geographic Measures of Consumer Spending
Access to timely information on consumer spending is important to economic policymakers. The Census Bureau's monthly retail trade survey is a primary source for monitoring consumer spending nationally, but it is not well suited to study localized or short-lived economic shocks. Moreover, lags in the publication of the Census estimates and subsequent, sometimes large, revisions diminish its usefulness for real-time analysis. Expanding the Census survey to include higher frequencies and subnational detail would be costly and would add substantially to respondent burden. We take an alternative ...
Forecasts of Economic Activity in the Great Recession
Forecasts by the Board staff for economic activity during the Great Recession proved to be overly optimistic on some dimensions, such as GDP, and yet were appropriately pessimistic on other dimensions, such as the GDP gap (the deviation of GDP from potential output).
Report on the Economic Well-Being of U.S. Households in 2017
This report draws from the Board's fifth annual Survey of Household Economics and Decisionmaking (SHED) and examines the economic well-being and financial lives of Americans and their families.
Balance-Sheet Households and Fiscal Stimulus: Lessons from the Payroll Tax Cut and Its Expiration
Balance-sheet repair drove the response of a significant fraction of households to fiscal stimulus following the Great Recession. By combining survey, behavioral, and time-series evidence on the 2011 payroll tax cut and its expiration in 2013, this papers identifies and analyzes households who smooth debt repayment. These "balance-sheet households" are as prevalent as "permanent-income households," who smooth consumption in response to the temporary tax cut, and outnumber "constrained households," who temporarily boost spending. The asymmetric spending response of balance-sheet ...
Stability of risk preference
Stability of preferences is central to how economists study behavior. This paper uses panel data on hypothetical gambles over lifetime income in the Health and Retirement Study to quantify changes in risk tolerance over time and differences across individuals. The maximum-likelihood estimation of a correlated random effects model utilizes information from 12,000 respondents in the 1992-2002 HRS. The results support constant relative risk aversion and career selection on preferences. While risk tolerance changes with age and macroeconomic conditions, persistent differences across individuals ...
Shedding Light on Our Economic and Financial Lives
In November and December of 2017, we interviewed over 12,000 individuals, representative of all adults in the United States, about their economic and financial lives. Here we discuss the responses on three important economic issues: the role of economic conditions in the opioid epidemic; jobs with irregular schedules and varying income as a potential barrier to full employment; and how low rates of geographic mobility may relate to family support networks.