Our speaker will be Michael Haliassos (Goethe University Frankfurt).

He will give a talk on "Consumption and Account Balances in Crises: Have we neglected cognitive load?" (joint work with Tiziana Assenza and Alberto Cardaci).

Preliminary abstract: Geopolitical, financial and fiscal crises, Covid, and life events occupy people's minds while they make important economic decisions. We conducted an incentivized online experiment among a representative sample of 2000 French households. Facing a taxing and persistent cognitive load reduced consumption, especially under furlough risk, and increased account balances, especially for those not facing such risk. These effects did not arise from supply constraints or a worsening of credit constraints. Cognitive load affected primarily the optimality of the chosen policy rules and degraded the ability of the standard economic model to describe consumption behavior, but less so for college-educated subjects.

The talk will take place on June 5, 2023 at 12:30 pm in room TC.5.15