The New Yorker's James Surowiecki writes about the psychology of spending and saving in the context of gauging the impact of fiscal stimulus programs, citing the work of Richard Thaler, among others.
It stands in stark contrast to the view on spending from the perspective of permanent income hypothesis of Milton Friedman and others, which suggests that consumers respond to changes in their wealth, or permanent income, and not much to temporary blips in income, which are small relative to wealth.
