 Consistent with empirical evidence, about two-thirds of these households hold non-trivial amounts of illiquid wealth, despite holding little liquid wealth.These households are known as wealthy hand-to-mouth households, a term introduced in a 2014 study of fiscal stimulus policies by Kaplan and Violante.The existence of wealthy hand-to-mouth households in New Keynesian models matters for the effects of monetary policy, because the consumption behavior of those households is strongly sensitive to changes in disposable income, rather than variations in the interest rate (i.e.