For Gabriel Mihalache

KPC friend Gabriel recently ripped econ bloggers for no longer posting about economics (lol, imagine that!).

So here you go Gabe!

1. Maybe the Stimulus will work after all. The December 2007 JPE gives us "The Reaction of Consumer Spending and Debt to Tax Rebates" by Sumit Agarwal, Chunlin Liu, and Nicholas S. Souleles. Here is the abstract, an ungated version can be downloaded from here)

"We use a new panel data set of credit card accounts to analyze how consumers responded to the 2001 federal income tax rebates. We estimate the monthly response of credit card payments, spending, and debt, exploiting the unique, randomized timing of the rebate disbursement. We find that, on average, consumers initially saved some of the rebate, by increasing their credit card payments and thereby paying down debt. But soon afterward their spending increased, counter to the permanent income model. Spending rose most for consumers who were initially most likely to be liquidity constrained, whereas debt declined most (so saving rose most) for unconstrained consumers."

2. Researchers are finally checking their e-mail! From the crazy kids at Vox (fair and balanced?) comes "Is distance dying at last?" by Griffith, Lee, & Van Reenen. Here's a snippet (full article here):

"The well-known phenomenon of home bias in ideas is alive and well – German are quicker at citing other Germans, British quicker at citing other British, and so on. What is more interesting is how home bias has changed over time – on average the bars in the later period are lower than the bars in the earlier period. This suggests that home bias in ideas has fallen. In the later, post-1990 period, the French are only about 1% slower in citing Germans, and the Americans only about 5% slower in citing Germans inventors than the Germans themselves."