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

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  • 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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Bibliographic Info

Paper provided by Centre for Applied Macroeconomic Analysis, Crawford School of Public Policy, The Australian National University 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:een:camaaa:2009-22

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Cited by:
  1. Laura Berger-Thomson & Elaine Chung & Rebecca McKibbin, 2009. "Estimating Marginal Propensities to Consume in Australia Using Micro Data," RBA Research Discussion Papers rdp2009-07, Reserve Bank of Australia.
  2. Bruno Martorano & UNICEF Innocenti Research Centre, 2013. "The Australian Household Stimulus Package: Lessons from the recent economic crisis," Innocenti Working Papers inwopa697, UNICEF Innocenti Research Centre.
  3. Hielke Buddelmeyer & Kyle Peyton, 2013. "How Windfall Income Increases Gambling at Poker Machines," Melbourne Institute Working Paper Series wp2013n01, Melbourne Institute of Applied Economic and Social Research, The University of Melbourne.

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