Did the 2008 Rebate Fail? A Response to Taylor and Feldstein

Kenneth Lewis and Laurence Seidman

No 10-06, Working Papers from University of Delaware, Department of Economics

Abstract: Did the 2008 rebate fail to stimulate consumer spending? In their recent influential AER articles, John Taylor and Martin Feldstein each claim that BEA aggregate time series data show that the 2008 rebate failed. Re-examining the BEA data, we find that the data instead show there is a high probability that the rebate stimulated consumption. Moreover, the hypothesis that a rebate has half the impact of ordinary disposable income cannot be rejected. Thus, we find that analysis of the BEA aggregate time series data is consistent with the conclusion from the micro-data studies that the 2008 rebate stimulated consumer spending.

Keywords: fiscal policy; fiscal stimulus; tax rebates (search for similar items in EconPapers)
JEL-codes: E62 (search for similar items in EconPapers)
Pages: 31 pages
Date: 2010
New Economics Papers: this item is included in nep-mac, nep-pbe and nep-pub
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (1)

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Related works:
Journal Article: Did the 2008 rebate fail? a response to Taylor and Feldstein (2011)
Working Paper: Did the 2008 Rebate Fail? A Response to Taylor and Feldstein (2011)
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