The reaction of consumer spending and debt to tax rebates – evidence from consumer credit data

We use a new panel dataset of credit card accounts to analyze how consumer 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 afterwards their spending increased, counter to the canonical 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. More generally, the results suggest that there can be important dynamics in consumers’ response to “lumpy” increases in income like tax rebates, working in part through balance sheet (liquidity) mechanisms

On thermalization in the SYK and supersymmetric SYK models

The eigenstate thermalization hypothesis is a compelling conjecture which strives to explain the apparent thermal behavior of generic observables in closed quantum systems. Although we are far from a complete analytic understanding, quantum chaos is often seen as a strong indication that the ansatz holds true. In this paper, we address the thermalization of energy eigenstates in the Sachdev-Ye-Kitaev model, a maximally chaotic model of strongly-interacting Majorana fermions. We numerically investigate eigenstate thermalization for specific few-body operators in the original SYK model as well as its $\mathcal{N}=1$ supersymmetric extension and find evidence that these models satisfy ETH. We discuss the implications of ETH for a gravitational dual and the quantum information-theoretic properties of SYK it suggests.Comment: Published versio

Theory of optical imaging beyond the diffraction limit with a far-field superlens

Recent theoretical and experimental studies have shown that imaging with resolution well beyond the diffraction limit can be obtained with so-called superlenses. Images formed by such superlenses are, however, in the near field only, or a fraction of wavelength away from the lens. In this paper, we propose a far-field superlens (FSL) device which is composed of a planar superlens with periodical corrugation. We show in theory that when an object is placed in close proximity of such a FSL, a unique image can be formed in far-field. As an example, we demonstrate numerically that images of 40 nm lines with a 30 nm gap can be obtained from far-field data with properly designed FSL working at 376nm wavelength.Comment: 6 pages, 3 figure

The reaction of consumer spending and debt to tax rebates; evidence from consumer credit data

The authors use a new panel data set of credit card accounts to analyze how consumers responded to the 2001 federal income tax rebates. They estimate the monthly response of credit card payments, spending, and debt, exploiting the unique, randomized timing of the rebate disbursement. They 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 canonical 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. More generally, the results suggest that there can be important dynamics in consumers' response to "lumpy" increases in income like tax rebates, working in part through balance-sheet (liquidity) mechanisms. ; Also issued as Payment Cards Center Discussion Paper No. 07-18Taxation ; Consumer credit

The reaction of consumer spending and debt to tax rebates – evidence from consumer credit data

We use a new panel dataset 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 afterwards spending increased, counter to the canonical Permanent-Income model. For people whose most intensively used credit card account is in the sample, spending on that account rose by over $200 cumulatively over the nine months after rebate receipt, which represents over 40% of the average household rebate. Because these results relied exclusively on exogenous, randomized variation, they represent compelling evidence of a causal link from the rebate to spending. ; Further, we found significant heterogeneity in the response to the rebate across different types of consumers. Notably, spending rose most for consumers who were initially most likely to be liquidity constrained according to various criteria, for example consumers who appeared to be initially constrained by their credit limits (before making additional payments). By contrast, debt declined most (so saving rose most) for unconstrained consumers. These results suggest that liquidity constraints are important. More generally, we found that there can be important dynamics in consumers’ response to ‘lumpy’ increases in income like tax rebates, working in part through balance sheet (liquidity) mechanisms.Consumer behavior ; Consumer credit ; Credit cards

The Reaction of Consumer Spending and Debt to Tax Rebates -- Evidence from Consumer Credit Data

We use a new panel dataset 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 afterwards their spending increased, counter to the canonical 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. More generally, the results suggest that there can be important dynamics in consumers' response to "lumpy" increases in income like tax rebates, working in part through balance sheet (liquidity) mechanisms.

Chaos, Complexity, and Random Matrices

Chaos and complexity entail an entropic and computational obstruction to describing a system, and thus are intrinsically difficult to characterize. In this paper, we consider time evolution by Gaussian Unitary Ensemble (GUE) Hamiltonians and analytically compute out-of-time-ordered correlation functions (OTOCs) and frame potentials to quantify scrambling, Haar-randomness, and circuit complexity. While our random matrix analysis gives a qualitatively correct prediction of the late-time behavior of chaotic systems, we find unphysical behavior at early times including an $\mathcal{O}(1)$ scrambling time and the apparent breakdown of spatial and temporal locality. The salient feature of GUE Hamiltonians which gives us computational traction is the Haar-invariance of the ensemble, meaning that the ensemble-averaged dynamics look the same in any basis. Motivated by this property of the GUE, we introduce $k$-invariance as a precise definition of what it means for the dynamics of a quantum system to be described by random matrix theory. We envision that the dynamical onset of approximate $k$-invariance will be a useful tool for capturing the transition from early-time chaos, as seen by OTOCs, to late-time chaos, as seen by random matrix theory.Comment: 61 pages, 14 figures; v2: references added, typos fixe

Do consumers choose the right credit contracts?

We find that on average consumers chose the contract that ex post minimized their net costs. A substantial fraction of consumers (about 40%) still chose the ex post sub-optimal contract, with some incurring hundreds of dollars of avoidable interest costs. Nonetheless, the probability of choosing the sub-optimal contract declines with the dollar magnitude of the potential error, and consumers with larger errors were more likely to subsequently switch to the optimal contract. Thus most of the errors appear not to have been very costly, with the exception that a small minority of consumers persists in holding substantially sub-optimal contracts without switching. Klassifikation: G11, G21, E21, E5