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How Much Did the 2009 Fiscal Stimulus Boost Spending? Evidence from a Household Survey

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Author Info
Andrew Leigh ()

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Abstract

Using survey evidence, I estimate the impact of a $12 billion package of household payments delivered in Australia between March and May 2009. Forty percent of households who said that they received the payment reported having spent it. This is approximately twice the spending rate that has been recorded in surveys assessing the 2001 and 2008 tax rebates in the United States. Using an approach for converting spending rates into an aggregate marginal propensity to consume (MPC), this is consistent with an aggregate MPC of 0.41-0.42. Since this estimate is based only on first-quarter spending, it may be an underestimate of the longer-run impact of the package on consumer expenditure.

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File URL: http://cama.anu.edu.au/Working%20Papers/Papers/2009/Leigh_222009.pdf
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Paper provided by Australian National University, Centre for Applied Macroeconomic Analysis in its series CAMA Working Papers with number 2009-22.

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Length: 21 pages
Date of creation: Sep 2009
Date of revision:
Handle: RePEc:acb:camaaa:2009-22

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Find related papers by JEL classification:
H24 - Public Economics - - Taxation, Subsidies, and Revenue - - - Personal Income and Other Nonbusiness Taxes and Subsidies
H31 - Public Economics - - Fiscal Policies and Behavior of Economic Agents - - - Household

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This page was last updated on 2009-12-28.

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