Data and Code for: The Marginal Propensity to Consume over the Business Cycle
Principal Investigator(s): View help for Principal Investigator(s) Tal Gross, Boston University; Matthew Notowidigdo, Northwestern University; Jialan Wang, University of Illinois
Version: View help for Version V1
| Name | File Type | Size | Last Modified |
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| Gross-Noto-Wang_AEJ-Macro_replication-kit | 10/29/2019 02:54:PM | ||
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application/pdf | 906.9 KB | 10/29/2019 10:53:AM |
Project Citation:
Gross, Tal, Notowidigdo, Matthew, and Wang, Jialan. Data and Code for: The Marginal Propensity to Consume over the Business Cycle. Nashville, TN: American Economic Association [publisher], 2020. Ann Arbor, MI: Inter-university Consortium for Political and Social Research [distributor], 2020-06-04. https://doi.org/10.3886/E115211V1
Project Description
Summary:
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We estimate how the marginal propensity to consume (MPC) out of
liquidity varies over the business cycle. Ten years after a Chapter 7
bankruptcy, the bankruptcy flag is removed from the filer's credit
report, generating an increase in credit score. In the year following
flag removal, credit card limits increase by $778 and credit card
balances increase by $290, implying an MPC of 0.37. Using cohorts of
flag removals, we find that the MPC was 20 to 30 percent higher during
the Great Recession, increased during the 2001 recession, and is
positively correlated with the local unemployment rate.
Scope of Project
Subject Terms:
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bankruptcy;
recession;
mpc
JEL Classification:
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D12 Consumer Economics: Empirical Analysis
E30 Prices, Business Fluctuations, and Cycles: General (includes Measurement and Data)
K35 Personal Bankruptcy Law
D12 Consumer Economics: Empirical Analysis
E30 Prices, Business Fluctuations, and Cycles: General (includes Measurement and Data)
K35 Personal Bankruptcy Law
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