Fiona E. Greig

JP Morgan Chase Institute
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Washington, DC 20004

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Institutional Affiliation: J.P. Morgan Chase & Co.

NBER Working Papers and Publications

July 2020Initial Impacts of the Pandemic on Consumer Behavior: Evidence from Linked Income, Spending, and Savings Data
with Natalie Bachas, Peter Ganong, Pascal J. Noel, Joseph S. Vavra, Arlene Wong, Diana Farrell: w27617
We use U.S. household-level bank account data to investigate the heterogeneous effects of the pandemic on spending and savings. Households across the income distribution all cut spending from March to early April. Since mid April, spending has rebounded most rapidly for low-income households. We find large increases in liquid asset balances for households throughout the income distribution. However, lower-income households contribute disproportionately to the aggregate increase in balances, relative to their pre-pandemic shares. Taken together, our results suggest that spending declines in the initial months of the recession were primarily caused by direct effects of the pandemic, rather than resulting from labor market disruptions. The sizable growth in liquid assets we observe for low-in...
Wealth, Race, and Consumption Smoothing of Typical Income Shocks
with Peter Ganong, Damon Jones, Pascal J. Noel, Diana Farrell, Chris Wheat: w27552
We estimate the elasticity of consumption with respect to income using an instrument based on firm-wide changes in pay. While much of the consumption-smoothing literature uses variation in unusual windfall income, this instrument captures the temporary income variation that households typically experience. Furthermore, this estimator is precise, allowing us to address an open question about how much the elasticity varies with wealth. We find a much lower consumption response for high-liquidity households, which may help discipline structural models. We then use this instrument to study how wealth shapes racial inequality. An extensive body of work documents a substantial racial wealth gap. However, less is known about how this gap translates into differences in welfare on a month-to-month ...
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