The Economic Stimulus Payments of 2008 and the Aggregate Demand for Consumption

Christian Broda and Jonathan Parker

No 20122, NBER Working Papers from National Bureau of Economic Research, Inc

Abstract: Using a survey of households in the Nielsen Consumer Panel and the randomized timing of disbursement of the 2008 Economic Stimulus Payments, we find that a household's spending rose by ten percent the week it received a Payment and remained high cumulating to 1.5-3.8 percent of spending over three months. Our 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.

JEL-codes: D12 D91 E21 E62 (search for similar items in EconPapers)
Date: 2014-05
New Economics Papers: this item is included in nep-mac
Note: EFG ME PE
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Published as Broda, Christian & Parker, Jonathan A., 2014. "The Economic Stimulus Payments of 2008 and the aggregate demand for consumption," Journal of Monetary Economics, Elsevier, vol. 68(S), pages S20-S36.

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Journal Article: The Economic Stimulus Payments of 2008 and the aggregate demand for consumption (2014)
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