The Economic Stimulus Payments of 2008 and the aggregate demand for consumption

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 10 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 13 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 part income; a household's spending did not increase significantly when it learned about its Payment. (C) 2014 Elsevier B.V. All rights reserved.