TY  - JOUR
AU  - Mian,Atif
AU  - Sufi,Amir
TI  - The Effects of Fiscal Stimulus: Evidence from the 2009 ‘Cash for Clunkers’ Program
JF  - National Bureau of Economic Research Working Paper Series
VL  - No. 16351
PY  - 2010
Y2  - September 2010
UR  - http://www.nber.org/papers/w16351
L1  - http://www.nber.org/papers/w16351.pdf
N1  - Author contact info:
Atif R. Mian
Princeton University
Bendheim Center For Finance
26 Prospect Avenue
Princeton, NJ 08540
E-Mail: atif@princeton.edu

Amir Sufi
University of Chicago
Booth School of Business
5807 South Woodlawn Avenue
Chicago, IL 60637
Tel: 773/702-6148
Fax: 773/702-0458
E-Mail: amir.sufi@chicagobooth.edu
M2  - featured in NBER digest on 2011-02-01
AB  - A key rationale for fiscal stimulus is to boost consumption when aggregate demand is perceived to be inefficiently low. We examine the ability of the government to increase consumption by evaluating the impact of the 2009 “Cash for Clunkers” program on short and medium run auto purchases. Our empirical strategy exploits variation across U.S. cities in ex-ante exposure to the program as measured by the number of “clunkers” in the city as of the summer of 2008. We find that the program induced the purchase of an additional 360,000 cars in July and August of 2009. However, almost all of the additional purchases under the program were pulled forward from the very near future; the effect of the program on auto purchases is almost completely reversed by as early as March 2010 – only seven months after the program ended. The effect of the program on auto purchases was significantly more short-lived than previously suggested. We also find no evidence of an effect on employment, house prices, or household default rates in cities with higher exposure to the program.
ER  -