Five Facts about MPCs: Evidence from a Randomized Experiment
Five Facts about MPCs: Evidence from a Randomized Experiment
This study conducted a randomized controlled trial to study the consumption response of French households to unanticipated one-time money transfers of 300 Euros. Using prepaid debit cards, it considers three implementation designs: (i) a transfer without restrictions; (ii) a transfer where any unspent value expires after three weeks; (iii) a transfer subject to a 10% negative interest rate every week. The study observes the participants’ main bank accounts, such that it can compute the impact of the transfer on their overall spending.