How individuals respond to a liquidity shock: Evidence from the 2013 government shutdown

• 成果类型: Article; Proceedings Paper
• 署名作者: Gelman, Michael; Kariv, Shachar; Shapiro, Matthew D.; Silverman, Dan; Tadelis, Steven
• 署名单位: Claremont Colleges; Claremont McKenna College; Claremont Graduate University; University of California System; University of California Berkeley; University of Michigan System; University of Michigan; Arizona State University; Arizona State University-Tempe; University of California System; University of California Berkeley; National Bureau of Economic Research
• 刊物名称: JOURNAL OF PUBLIC ECONOMICS
• ISSN/ISSBN: 0047-2727
• DOI: 10.1016/j.jpubeco.2018.06.007
• 发表日期: 2020
• 关键词: consumption; Spending; liquidity; fiscal policy; Marginal propensity to spend; Account data; Naturally-occurring data

摘要

Using comprehensive account records, this paper examines how individuals adjusted spending and saving in response to a temporary drop in liquidity due to the 2013 U.S. government shutdown. The shutdown cut paychecks by 40% for affected employees, which was recovered within 2 weeks. Because the shutdown affected only the timing of payments, it provides a distinctive experiment allowing estimates of the response to a liquidity shock holding income constant. Spending dropped sharply, implying a naive estimate of 58 cents less spending for every dollar of lost liquidity. This estimate overstates the consumption response. While many individuals had low liquid assets, they used multiple sources of short-term liquidity to smooth consumption. Sources of short-term liquidity include delaying recurring payments such as for mortgages and credit card balances. (c) 2018 Published by Elsevier B.V.