Using micro-level data, we document a systematic, income-related component in household income forecast errors. We show that these errors can be formalized by a modest deviation from rational expectations, where agents overestimate the persistence of their income process. We then investigate the...

This paper evaluates the marginal propensity to consume out of the 2020 CARES Act stimulus payments using high-frequency, transaction-level data for a sample of low-income debit cardholders. It finds that spending responds less on impact to the stimulus payments than to non-stimulus income (15...