The Effects of Fiscal Stimulus: Evidence from the 2009 'Cash for Clunkers' Program

Atif Mian and Amir Sufi

No 16351, NBER Working Papers from National Bureau of Economic Research, Inc

Abstract: A key rationale for fiscal stimulus is to boost consumption when aggregate demand is perceived to be inefficiently low. We examine the ability of the government to increase consumption by evaluating the impact of the 2009 "Cash for Clunkers" program on short and medium run auto purchases. Our empirical strategy exploits variation across U.S. cities in ex-ante exposure to the program as measured by the number of "clunkers" in the city as of the summer of 2008. We find that the program induced the purchase of an additional 360,000 cars in July and August of 2009. However, almost all of the additional purchases under the program were pulled forward from the very near future; the effect of the program on auto purchases is almost completely reversed by as early as March 2010 - only seven months after the program ended. The effect of the program on auto purchases was significantly more short-lived than previously suggested. We also find no evidence of an effect on employment, house prices, or household default rates in cities with higher exposure to the program.

JEL-codes: D12 E30 E32 E60 E62 E65 (search for similar items in EconPapers)
Date: 2010-09
Note: EFG ME POL
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (13)

Published as Atif Mian & Amir Sufi, 2012. "The Effects of Fiscal Stimulus: Evidence from the 2009 Cash for Clunkers Program," The Quarterly Journal of Economics, Oxford University Press, vol. 127(3), pages 1107-1142.

Downloads: (external link)
http://www.nber.org/papers/w16351.pdf (application/pdf)

Related works:
Journal Article: The Effects of Fiscal Stimulus: Evidence from the 2009 Cash for Clunkers Program (2012)
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:nbr:nberwo:16351

Ordering information: This working paper can be ordered from
http://www.nber.org/papers/w16351

Access Statistics for this paper

More papers in NBER Working Papers from National Bureau of Economic Research, Inc National Bureau of Economic Research, 1050 Massachusetts Avenue Cambridge, MA 02138, U.S.A.. Contact information at EDIRC.
Bibliographic data for series maintained by ().