Did the 2008 Rebate Fail? A Response to Taylor and Feldstein
Did the 2008 rebate fail to stimulate consumer spending? In their recent influential AER articles, John Taylor and Martin Feldstein each claim that BEA aggregate time series data show that the 2008 rebate failed. Re-examining 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 micro-data studies that the 2008 rebate stimulated consumer spending.
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- Nicholas S. Souleles & Jonathan A. Parker & David S. Johnson, 2006.
"Household Expenditure and the Income Tax Rebates of 2001,"
American Economic Review,
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- Claudia R. Sahm & Matthew D. Shapiro & Joel Slemrod, 2010. "Household Response to the 2008 Tax Rebate: Survey Evidence and Aggregate Implications," NBER Chapters,in: Tax Policy and the Economy, Volume 24, pages 69-110 National Bureau of Economic Research, Inc.
- Claudia R. Sahm & Matthew D. Shapiro & Joel B. Slemrod, 2009. "Household response to the 2008 tax rebates: survey evidence and aggregate implications," Finance and Economics Discussion Series 2009-45, Board of Governors of the Federal Reserve System (U.S.).
- Claudia R. Sahm & Matthew D. Shapiro & Joel B. Slemrod, 2009. "Household Response to the 2008 Tax Rebate: Survey Evidence and Aggregate Implications," NBER Working Papers 15421, National Bureau of Economic Research, Inc.