-making processes across households (the "why"). The combination of the quantitative estimation of household response dynamics with a … qualitative exploration of the mental models employed during financial decisions provides a more complete view of household … are significantly higher immediately following an income shock and diminish over time, with cumulative MPCs over a year …

Keynesian model. Relative to Representative Agent (RANK) models, our framework introduces a precautionary-savings channel, as … propensities to consume (MPC). While both channels amplify the size of spillovers/spillbacks, only precautionary savings can change …