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The Economic Stimulus Payments of 2008 and the Aggregate Demand for Consumption

  • Christian Broda
  • Jonathan A. Parker

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.

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Paper provided by National Bureau of Economic Research, Inc in its series NBER Working Papers with number 20122.

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Date of creation: May 2014
Date of revision:
Publication status: published as Broda, Christian & Parker, Jonathan A., 2014. "The Economic Stimulus Payments of 2008 and the aggregate demand for consumption," Journal of Monetary Economics, Elsevier, vol. 68(S), pages S20-S36.
Handle: RePEc:nbr:nberwo:20122
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