The Economic Stimulus Payments of 2008 and the Aggregate Demand for Consumption

Christian Broda, Jonathan A. Parker

NBER Working Paper No. 20122
Issued in May 2014
NBER Program(s):   EFG   ME   PE

Using a survey of households in the Nielsen Consumer Panel and the randomized timing of disbursement of the 2008 Economic Stimulus Payments, we find that a 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. Our 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.

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Document Object Identifier (DOI): 10.3386/w20122

Published: Broda, Christian & Parker, Jonathan A., 2014. "The Economic Stimulus Payments of 2008 and the aggregate demand for consumption," Journal of Monetary Economics, Elsevier, vol. 68(S), pages S20-S36. citation courtesy of

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