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This paper uses a unique panel dataset of consumer financial transactions to study how consumers respond to an exogenous unanticipated income shock. Consumption rose significantly after the fiscal policy announcement: during the ten subsequent months, for each $1 received, consumers on average spent $0.80. We find a strong announcement effect—19 percent of the response occurs during the first two-month announcement period via credit cards. Subsequently, consumers switched to debit cards after disbursement before finally increasing spending on credit cards in the later months. Consumers with low liquid assets or with low credit card limit experienced stronger consumption responses. (JEL D12, D14, E21)

Intro -- Acknowledgments -- Contents -- List of Figures -- List of Tables -- Chapter 1: Introduction -- 1 Saving -- 2 Consumption -- 3 Investment -- 4 Housing -- 5 Payment -- 6 Borrowing -- 7 Risk Management -- 8 Financial Inclusion and Financial Technology -- 9 Impact of Interventions -- 9.1 Education -- 9.2 Peer and Social Influence -- 9.3 Product Design -- 9.4 Market Design -- 9.5 Fiscal Stimulus -- References -- Chapter 2: Saving -- 1 Introduction -- 1.1 The Experience in Britain and Europe -- 1.1.1 1700-1800s: Thrift and Individual Self-Reliance -- 1.1.2 1900-1940s: Thrift to Finance Infrastructure and War -- 1.1.3 1940s-1960s: Restoration Through Thrift -- 1.1.4 From 1960s: Decline of Saving -- 1.2 The Experience in the US -- 1.2.1 1800s-1900s: Weak Commitment -- 1.2.2 1930-1950: The Golden Age of Saving in the US -- 1.2.3 1950s: Consumption-Oriented Economics -- 1.2.4 1980s-2008: Further Collapse of Saving -- 1.2.5 After 2008: Post Financial Crisis -- 1.3 The Experience in Asia -- 1.3.1 Indonesia -- 1.3.2 Philippines -- 1.3.3 India -- 1.3.4 Singapore -- 1870-1940: Building a POSB -- 1940-1945: Japanese Model of Thrift -- After Japanese Occupation: Independence -- 1.3.5 Japan -- Early 1880s: Thrift Philosopher -- 1880s-1940s: Thrift as a National Duty -- 1940s-1980s: Restoring Japan Through Thrift -- 1980s-1990s: Japan's Peak in Thrift and Consumption -- 1.3.6 Korea -- 1905 to 1945: Domestic Saving -- 1950 to 1953: Korean War -- 1954 to 1997: Aftermath of the Korean War -- 1997 to Present: Asian Financial Crisis -- 1.3.7 China -- 1980s: Saving Boom -- 1.4 Conclusion of Historical Review -- 2 Theory -- 2.1 Classical Model -- 2.2 Keynesian Saving Function -- 2.3 ISLM Model -- 2.3.1 Early Tests of Keynes' Saving Function -- 2.4 Permanent Income Hypothesis -- 2.5 Life Cycle Hypothesis.

It is well established that consumption is "hump" shaped over an individual's lifecycle, peaking in middle age and then declining in the years that follow. Prior research has documented that consumption declines at retirement, which is inconsistent with the standard lifecycle model with consumption smoothing. Using a unique dataset with detailed administrative records of credit and debit card transactions, we show the hump shaped lifecycle consumption pattern as documented in the literature. Additionally, we show compositional changes in consumption expenditures across individuals in the years surrounding retirement confirming the results of Aguiar and Hurst (2005, 2013).