Sørensen, Bent E.; Luengo-Prado, Maria Jose - Department of Economics, University of Houston - 2005
This article estimates marginal propensities to consume (MPC) out of current and lagged income for U.S. states using panel data regressions that control for time-specific and state-level fixed effects. The MPCs vary across states, in particular, the MPC out of current income is higher in states...