Economics Blog :: John S. Irons

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Did the 2008 US tax rebates work?

Posted on August 15, 2008

New research by Broda/Parker suggests the answer is yes . The rebate checks seem to have increased consumption.Did the 2008 US tax rebates work? vox - Research-based policy analysis and commentary from leading economistsThis spring, the US government handed out $100 billion in tax rebates. Twentieth century economic thinking - permanent income hypothesis, Ricardian equivalence, and the like - suggests that most would have been saved, as Martin Feldstein recently argued. Not so. Recent research on microdata shows that the typical family increased spending by 3.5% when the rebate arrived, boo...

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