TY  - JOUR
AU  - Shapiro,Matthew D.
AU  - Slemrod,Joel B.
TI  - Did the 2008 Tax Rebates Stimulate Spending?
JF  - National Bureau of Economic Research Working Paper Series
VL  - No. 14753
PY  - 2009
Y2  - February 2009
UR  - http://www.nber.org/papers/w14753
L1  - http://www.nber.org/papers/w14753.pdf
N1  - Author contact info:
Matthew D. Shapiro
Department of Economics
University of Michigan
611 Tappan St
Ann Arbor, MI 48109-1220
Tel: 734/764-5419
Fax: 734 764-2769
E-Mail: shapiro@umich.edu

Joel Slemrod
University of Michigan Business School
701 Tappan Street
Room R5396
Ann Arbor, MI  48109-1234
Tel: 734/936-3914
Fax: 734-615-4323
E-Mail: jslemrod@umich.edu
AB  - 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.
ER  -