Manuel Adelino - Duke Fuqua

Abstract  

The marginal propensity to consume (MPC) out of liquidity provided by a largescale debt forbearance program serves as a sufficient statistic for both changes in borrower creditworthiness and the stimulative effect of the policy. Using transaction-level data from a Portuguese bank during COVID-19, we show thatthe average MPC is about 15 cents per euro, with significant heterogeneity across households. Borrowers with lower liquid wealth and income exhibit substantially higher MPCs, indicating a deterioration in their creditworthiness. This heterogeneity underscores the trade-off between the short-term economic stimulus provided by debt forbearance and the potential credit risks that emerge once the program ends.

Additional information:

• Speaker: Manuel Adelino 
• Time: Wednesday, 30.04.2025, 14:45 - 16:00
• Location: Faculty Lounge, Room 0.036
• Further links:
  • Manuel Adelino 's webpage¹
• Organizer: Finance Group
• Contact:
  • Almut Lunkenheimer
  • +49 228 73-9228
  • ifs@uni-bonn.de