Can Stimulus Checks Boost an Economy Under Covid-19? Evidence from South Korea

Moon Jung Kim and Soohyung Lee

International Economic Journal, 2021, vol. 35, issue 1, 1-12

Abstract: Various countries have implemented transfer programs to individuals since the Covid-19 outbreaks. However, the extent to which such transfers alleviate economic recessions is unclear. This paper analyzes a South Korean program, which provided vouchers redeemable only at small local businesses. We find that, due to the program, over 30% of households across all income groups increased their food and overall household spending, but the usage restriction may have affected consumer choice as well as competition among businesses. While the employment and sales of small businesses improved, the program’s fiscal sustainability is in question because of the large tax exemption.

Date: 2021
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Persistent link: https://EconPapers.repec.org/RePEc:taf:intecj:v:35:y:2021:i:1:p:1-12

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DOI: 10.1080/10168737.2020.1864435

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