The Economic Stimulus Payments of 2008 and the Aggregate Demand for Consumption
39 Pages Posted: 3 May 2014 Last revised: 28 Aug 2016
Date Written: April 24, 2014
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 ten 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, stabilization, tax policy
JEL Classification: E62, D91, E21, D12
Suggested Citation: Suggested Citation