Warning: Cynical poster alert. Modern economics is inextricably entwined with politics. Look at the last line of the conclusion: > Second, we showed that the

Warning: Cynical poster alert. Modern economics is inextricably entwined with politics. Look at the last line of the conclusion: > Second, we showed that the model that allows for W-HtM behavior implies that to maximize the aggregate consumption response to scal stimulus payments, the payments should feature more moderate phasing out with household income. During the economic shock of 2008, there was a fiscal response applied that was pretty much formulated in the wake of the depression: Give money to folks who are very poor (unemployment, welfare, foodstamps), who will then boost the economy a bit because they will not save/hoard the money or go tie up wealth in long-term assets. The current paper is pointing out: "Hey, there are wealthy people living hand-to-mouth. If you give money (= "fiscal stimulus") to them, you will achieve a boost in the economy as well." Who knows, maybe the conclusion is right. But god knows how you'd achieve any confidence that the conclusion wasn't a function of the authors' funding.