Did the 2008 rebate fail? a response to Taylor and Feldstein
Did the 2008 rebate fail to stimulate consumer spending? In their influential American Economic Review articles, John Taylor and Martin Feldstein each claim that Bureau of Economic Analysis (BEA) aggregate time series data show that the 2008 rebate failed. Reexamining the BEA data, we find that the data instead show there is a high probability that the rebate stimulated consumption. Moreover, the hypothesis that a rebate has half the impact of ordinary disposable income cannot be rejected. Thus, we find that analysis of the BEA aggregate time series data is consistent with the conclusion from the microdata studies that the 2008 rebate stimulated consumer spending.
Volume (Year): 34 (2011)
Issue (Month): 2 (January)
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- Nicholas S. Souleles & Jonathan A. Parker & David S. Johnson, 2006.
"Household Expenditure and the Income Tax Rebates of 2001,"
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