Abstract

http://ssrn.com/abstract=1349586
 
 

References (7)



 
 

Citations (13)



 


 



Did the 2008 Tax Rebates Stimulate Spending?


Matthew D. Shapiro


University of Michigan at Ann Arbor - Department of Economics; National Bureau of Economic Research (NBER)

Joel B. Slemrod


University of Michigan, Stephen M. Ross School of Business; National Bureau of Economic Research (NBER)

February 2009

NBER Working Paper No. w14753

Abstract:     
Only one-fifth of respondents to a rider on the University of Michigan Survey Research Center's Monthly Survey said that the 2008 tax rebates would lead them to mostly increase spending. Almost half said the rebate would mostly lead them to pay off debt, while about a third saying it would lead them mostly to save more. The survey responses imply that the aggregate propensity to spend from the rebate was about one-third, and that there would not be substantially more spending as a lagged effect of the rebates. Because of the low spending propensity, the rebates in 2008 provided low "bang for the buck" as economic stimulus. Putting cash into the hands of the consumers who use it to save or pay off debt boosts their well-being, but it does not necessarily make them spend. Low-income individuals were particularly likely to use the rebate to pay off debt.

Number of Pages in PDF File: 14

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Date posted: February 26, 2009  

Suggested Citation

Shapiro, Matthew D. and Slemrod, Joel B., Did the 2008 Tax Rebates Stimulate Spending? (February 2009). NBER Working Paper No. w14753. Available at SSRN: http://ssrn.com/abstract=1349586

Contact Information

Matthew D. Shapiro (Contact Author)
University of Michigan at Ann Arbor - Department of Economics ( email )
and Survey Research Center
611 Tappan Street
Ann Arbor, MI 48109-1220
United States
313-764-5419 (Phone)
313-764-2769 (Fax)
National Bureau of Economic Research (NBER) ( email )
1050 Massachusetts Avenue
Cambridge, MA 02138
United States
313-764-5419 (Phone)
313-764-2769 (Fax)
Joel B. Slemrod
University of Michigan, Stephen M. Ross School of Business ( email )
701 Tappan Street
Room A2120
Ann Arbor, MI 48109-1234
United States
734-936-3914 (Phone)
734-763-4032 (Fax)
National Bureau of Economic Research (NBER)
1050 Massachusetts Avenue
Cambridge, MA 02138
United States
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References:  7
Citations:  13

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