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Replication data for: Can Tax Rebates Stimulate Consumption Spending in a Life-Cycle Model?

Version
V0
Resource Type
Dataset
Creator
  • Huntley, Jonathan
  • Michelangeli, Valentina
Publication Date
2014-01-01
Description
  • Abstract

    We build a life-cycle model with earnings risk, liquidity constraints, and portfolio choice over tax-deferred and taxable assets to evaluate how household consumption changes in response to shocks to transitory anticipated income, such as the 2001 income tax rebate. Households optimally invest in tax-deferred assets, which are encumbered by withdrawal penalties, and exchange taxable precautionary savings for higher after-tax returns. The model predicts a higher marginal propensity to consume out of a rebate than is predicted by a standard frictionless life-cycle model. Liquidity-constrained households—with few financial assets or portfolios expensive to reallocate—consume a higher fraction of the rebates.
Availability
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Relations
  • Is supplement to
    DOI: 10.1257/mac.6.1.162 (Text)
Publications
  • Huntley, Jonathan, and Valentina Michelangeli. “Can Tax Rebates Stimulate Consumption Spending in a Life-Cycle Model?” American Economic Journal: Macroeconomics 6, no. 1 (January 2014): 162–89. https://doi.org/10.1257/mac.6.1.162.
    • ID: 10.1257/mac.6.1.162 (DOI)

Update Metadata: 2020-05-18 | Issue Number: 2 | Registration Date: 2019-10-13

Huntley, Jonathan; Michelangeli, Valentina (2014): Replication data for: Can Tax Rebates Stimulate Consumption Spending in a Life-Cycle Model?. Version: V0. ICPSR - Interuniversity Consortium for Political and Social Research. Dataset. https://doi.org/10.3886/E114286