Kreiner, Lassen and Leth-Petersen publishes in American Economic Journal: Economic Policy

"Liquidity Constraint Tightness and Consumer Responses to Fiscal Stimulus Policy"

The marginal interest rate is the rate of interest at which a household can access additional liquidity. Consumption theory posits that variation in marginal interest rates across consumers predicts differences in the propensity to spend a stimulus payment. This hypothesis is directly tested in the context of a Danish 2009 stimulus policy that transformed illiquid pension wealth into liquid wealth. The analysis is based on administrative records with account level information about loans and deposits to derive a household level measure of the marginal interest rate, which is merged with survey data collected specifically to measure the spending response to the stimulus policy. The data reveal substantial variation in marginal interest rates across consumers, and these interest rates predict spending responses

You can read the full article here: Claus Thustrup Kreiner, David Dreyer Lassen, and Søren Leth-Petersen “Liquidity Constraint Tightness and Consumer Responses to Fiscal Stimulus Policy”, or you can read the authors condensed introduction to the results at our CEBI research site.