Do Temporary Cash Transfers Stimulate the Macroeconomy? Evidence from Four Case Studies

Valerie Ramey

No 33503, NBER Working Papers from National Bureau of Economic Research, Inc

Abstract: This paper re-evaluates the effectiveness of temporary transfers in stimulating the macroeconomy using evidence from four case studies. The rebirth of Keynesian stabilization policy has lingering costs in terms of higher debt paths, so it is important to assess the benefits of these policies. In each case study, I analyze whether the behavior of the aggregate data is consistent with the transfers providing an effective stimulus. Two of the case studies are reviews of evidence from my recent work on the 2001 and 2008 U.S. tax rebates. The other two case studies are new analyses of temporary transfers in Singapore and Australia. In all four instances, the evidence suggests that temporary cash transfers to households likely provided little or no stimulus to the macroeconomy.

JEL-codes: E21 E27 E62 (search for similar items in EconPapers)
Date: 2025-02
New Economics Papers: this item is included in nep-mac and nep-sea
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