Ricardian Non-Equivalence with Martin Eichenbaum and Joao Guerreiro

Abstract: This paper presents new survey evidence on how household spending changes in response to fiscal transfers. Our key finding is that the planned propensity to spend out of transfers equals the marginal propensity to consume (MPC). This result implies that households do not incorporate future tax liabilities into their spending plans. The canonical HANK model cannot account for our survey results because people in that model are overly sensitive to future tax liabilities. We develop an extended HANK model in which households are partially inattentive to future tax liabilities and to the general-equilibrium consequences of fiscal policy. This inattention dampens forward-looking intertemporal MPCs, bringing the model into line with our survey evidence. We use the model to analyze the aggregate effects of fiscal policy changes and find that both transfer and government spending multipliers are larger in the inattentive HANK model than in the canonical HANK framework.

Shopping From Home with Scott Baker, Nicholas Bloom and Stephanie Johnson  

Abstract: Conducting a new survey on the Nielsen Consumer panel we examine the impact of working from home (WFH) on shopping, finding three key results. First, WFH changed shopping modes, increasing online shopping and the fraction of trips to stores on weekdays. Second, WFH increased total spending through increased product quantity and range, tilting expenditure towards food and general merchandise and away from health and beauty products. Finally, WFH increased prices paid by shoppers and lowered price elasticities due to a move towards higher-cost products and lower deal usage. The change in prices paid is concentrated among married households, driven by a redistribution of shopping responsibility within the household, especially when the new remote worker is male. We find that remote workers engage in more shopping trips but fewer minutes of shopping. Our results suggest that shifting to remote work increases prices paid for groceries by about 1%, highlighting how WFH is impacting households, retail and inflation.