We show how tax kinks can be used to estimate the marginal propensity to consume (MPC). Tax kinks create discrete changes in the relationship between taxable income and disposable income, which – under a set of testable assumptions – enables causal identification of the spending response to...

What sources of information do consumers use in forming their inflation expectations? We show for the United States and Australia that consumers report significantly lower inflation expectations when the political party they support holds executive office. This is surprising because both the...

This paper seeks to identify the effect of consumer sentiment on consumption. Using Australian consumer sentiment data, which is unique in asking individuals about their political preferences, we show that consumers report substantially higher levels of sentiment when their self-identified...

We show how tax kinks can be used to estimate the marginal propensity to consume (MPC). Tax kinks create discrete changes in the relationship between taxable income and disposable income, which - under a set of testable assumptions - enables causal identification of the spending response to...