Skip to main content

IFS-STICERD Public Economics Seminar

Implementing Helicopter Money with Negative Interest Rates: Evidence from a Randomized Experiment

Xavier Jaravel (LSE)

Wednesday 16 November 2022 12:30 - 13:45

Many of our seminars and public events this year will continue as in person or as hybrid (online and in person) events. Please check our website listings and Twitter feed @STICERD_LSE for updates.

Unless otherwise specified, in-person seminars are open to the public.

Those unable to join the seminars in-person are welcome to participate via zoom if the event is hybrid.


About this event

In this paper, we estimate the marginal propensity to consume (MPC) in an experimentallocating monetary transfers at random to a sample representative of the population of French households. Our experiment provides 300 euro gift cards to participants, with three types of cards: (i) type 1 has no restrictions; (ii) type 2 expires three weeks after the date of receipt; (iii) type 3 has an automatic 10% negative interest rate at the end of each week. We study the participants’ spending behavior on the gift card and estimate their overall MPC using linked, comprehensive bank account data. We find that the MPC is much larger when the gift card features negativeinterest rates or an expiration date. We discuss the extent to which these findings are informative for macroeconomic models as well as for policy, e.g. for the design of direct transfers to households using central bank digital currency

This seminar series is jointly organized by the IFS and STICERD.

IFS-STICERD Public Economics seminars are held on Wednesdays in term time at 12.30-13.45 IN PERSON at the IFS.

Seminar organisers: Stuart Adam (IFS), Monica Costa Dias (IFS), Xavier Jaravel (LSE), Camille Landais (LSE), Attila Lindner (UCL), Joana Naritomi (LSE), and Johannes Spinnewijn (LSE).

For further information please contact Lubala Chibwe, either by email: l.chibwe@lse.ac.uk.

Please use this link to subscribe or unsubscribe to the IFS-STICERD Public Economics seminars mailing list (pubecon).