Households' Balance Sheets and the Effect of Fiscal Policy

Using households' balance-sheet composition in the Panel Survey of Income Dynamics, we identify six household types. Since 1999, there has been a decline share patient households and an increase impatient with negative wealth. six-agent New Keynesian model search matching frictions, explore how changes shares affect transmission government spending shocks. We show that relative left tail wealth distribution plays key role aggregate marginal propensity to consume, magnitude fiscal multipliers, distributional consequences While output consumption multipliers are positively correlated wealth, size employment multiplier is negatively correlated. Moreover, our calibrated can deliver jobless expansions.