The Economic Stimulus Payments of 2008 and the aggregate demand for consumption

Christian Broda and Jonathan Parker

Journal of Monetary Economics, 2014, vol. 68, issue S, S20-S36

Abstract: Households in the Nielsen Consumer Panel were surveyed about their 2008 Economic Stimulus Payment. In estimates identified by the randomized timing of disbursement, the average household׳s spending rose by 10 percent the week it received a Payment and remained high cumulating to 1.5–3.8 percent of spending over three months. These estimates imply partial-equilibrium increases in aggregate demand of 1.3 percent of consumption in the second quarter of 2008 and 0.6 percent in the third. Spending is concentrated among households with low wealth or low past income; a household׳s spending did not increase significantly when it learned about its Payment.

Keywords: Consumption smoothing; Fiscal stimulus; Tax policy; Consumer demand (search for similar items in EconPapers)
Date: 2014
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Citations: View citations in EconPapers (91)

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Working Paper: The Economic Stimulus Payments of 2008 and the Aggregate Demand for Consumption (2014)
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Persistent link: https://EconPapers.repec.org/RePEc:eee:moneco:v:68:y:2014:i:s:p:s20-s36

DOI: 10.1016/j.jmoneco.2014.09.002

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