Orchard, Jacob; Ramey, Valerie A.; Wieland, Johannes - National Bureau of Economic Research - 2023
We present evidence that the high estimated MPCs from the leading household studies result in implausible macroeconomic counterfactuals. Using the 2008 tax rebate as a case study, we calibrate a standard medium-scale New Keynesian model with the estimated micro MPCs to construct counterfactual...