Fun Friday: Marginal Propensity to Consume

One question our office gets quite frequently about the kicker is what sort of economic impact does it have. After all we are returning hundreds of millions, if not a billion, dollars to taxpayers who likely did not budget the kicker into their household finances. They’re certainly going to spend some of it, increasing consumer spending and stimulating the economy to some degree.

Previously our office used a 2015 study from Carroll, Slacalek, Tokuoka, and White that looked at what economists call the marginal propensity to consume (MPC). If you received $100 today, how much of that would you spend relatively quickly?

Source: Fun Friday: Marginal Propensity to Consume | Oregon Office of Economic Analysis