Fiscal Stimulus and Households' Non-Durable Consumption Expenditures: Evidence from the 2009 Australian Nation Building and Jobs Plan

Fiscal stimulus
Photo: Nerthuz/

Emma Aisbett, Markus Brueckner, Ralf Steinhauser, and Rhett Wilcox

In 2009 the Australian government delivered approximately $8 billion in direct payments to households. These payments were preannounced and randomly allocated to households based on postal codes over a 5-week period. We exploit this random allocation to estimate the causal response of households' non-durable consumption expenditures to a transitory, anticipated income increase. Our main findings are that: (i) non-durable consumption expenditures did not react significantly during or after the one-time, pre-announced transfer; (ii) there is a small, albeit statistically significant increase in non-durable consumption expenditures at the time of the announcement of the fiscal stimulus.

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