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

By Christian M. Broda, Jonathan A. Parker. 2014

214 citations recorded by the source corpus.

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.

Subfields: Accounting, Economics and Econometrics, General Health Professions

View Paper: https://www.semanticscholar.org/paper/d47d2c4ce8a8aff1630cca20559a9861179af279

How researchers see this paper

The researchers whose trusted networks rank it highest, strongest advocate first. Every researcher gets a different order.

In Accounting

In Economics and Econometrics

In General Health Professions

Citations in the corpus

The Liquid Hand-to-Mouth: Evidence from Personal Finance Management Software (2018, background): “(2013), and Broda and Parker (2014) as surveyed in Jappelli and Pistaferri (2010) or Fuchs-Schundeln and Hassan (2015).”
Income, Liquidity, and the Consumption Response to the 2020 Economic Stimulus Payments (2020, methodology): “Broda and Parker (2014) use high-frequency scanner data and find large positive effects on spending. In Section 6.1, we discuss some of the differences between our estimates and the previous literature that analyze previous stimulus programs. Besides looking at aggregate effects, studies have also f”
THE MORPHOLOGY OF PRICE DISPERSION (2015, unknown): “Broda and Parker (2012) compared weekly spending in the KNCP and the Consumer Expenditure Survey (CEX).”
Explaining Consumption Excess Sensitivity with Near-Rationality: Evidence from Large Predetermined Payments (2015, unknown): “The magnitude is in line with previous research, such as Broda and Parker (2014) for example, who estimate the spending responses to the smaller economic stimulus payments in 2008 using the Nielsen Consumer Panel.”
Liquidity Constraints and Consumer Bankruptcy: Evidence from Tax Rebates (2014, background): “2 Liquidity constraints also affect subprime mortgage defaults in the months following lump-sum property tax payments (Anderson & Dokko, 2011). By contrast, Hurst and Lusardi (2004) do not find clear evidence that liquidity constraints restrict entry into entrepreneurship.”
Revisiting event study designs: robust and efficient estimation (2021, background): “Several papers have proposed ways to address these problems, introducing estimators that remain valid when treatment effects can vary arbitrarily (de Chaisemartin and D’Haultfœuille, 2021; Sun and Abraham, 2021; Callaway and Sant’Anna, 2021; Marcus and Sant’Anna, 2020; Cengiz et al., 2019). An impor”
The Distribution of Wealth and the Marginal Propensity to Consume (2017, unknown): “Economic stimulus payments (like those studied by Broda and Parker (2012)) are precisely the kind of transitory shock to which we are interested in households' responses, and so arguably a model (like ours) that explicitly includes transitory shocks (calibrated to micro evidence on their magnitude)…”
The Wealthy Hand-to-Mouth (2014, background): “…constraints, in the tradition of Huggett (1996), Aiyagari 1Some notable examples of micro-level evidence on excess sensitivity are Parker (1999), Souleles (1999), Shapiro and Slemrod (2003a, 2003b, 2009), Johnson, Parker, and Souleles (2006), Parker et al. (2013), and Broda and Parker (2014).”