| 000 -LEADER |
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| fixed length control field |
01186nam a22001457a 4500 |
| 008 - FIXED-LENGTH DATA ELEMENTS--GENERAL INFORMATION |
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221207b ||||| |||| 00| 0 eng d |
| 100 ## - MAIN ENTRY--PERSONAL NAME |
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| Personal name |
Gelman, Michael et al |
| 245 ## - TITLE STATEMENT |
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| Title |
Rational illiquidity and consumption: Theory and evidence from income tax withholding and refunds |
| 260 ## - PUBLICATION, DISTRIBUTION, ETC. (IMPRINT) |
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| Place of publication, distribution, etc |
The American Economic Review |
| 300 ## - PHYSICAL DESCRIPTION |
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| Extent |
112(9), Sep, 2022: p.2959-2991 |
| 520 ## - SUMMARY, ETC. |
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| Summary, etc |
Low liquidity and a high marginal propensity to consume are tightly linked. This paper analyzes this link in the context of income tax withholding and refunds. A theory of rational cash management with income uncertainty endogenizes the relationship between illiquidity and the marginal propensity to consume, and can explain the finding that households tend to spend tax refunds as if they valued liquidity, yet do not act to increase liquidity by reducing their withholding. The theory is supported by individual-level evidence based on financial account records, including a positive correlation between the size of tax refunds and the marginal propensity to consume out of those refunds. – Reproduced
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| 773 ## - HOST ITEM ENTRY |
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| Main entry heading |
The American Economic Review |
| 906 ## - LOCAL DATA ELEMENT F, LDF (RLIN) |
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| Subject DIP |
CONSUMPTION |
| 942 ## - ADDED ENTRY ELEMENTS (KOHA) |
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| Item type |
Articles |
