Americans receiving stimulus during the Great Recession spent at least a portion on automobiles, studies have shown.
The stimulus program of 2008, where the government paid an individual between $300 and $600, and couples received between $600 and $1,200, and paid $300 per child as well. According to the American Economic Association up to 90% of durable goods spending had to do with auto spending.
When Americans received their $1,200 checks recently, many have used it to keep a roof over their heads and food on the table, according to new research by a team of economists. “Given the size of the 2020 stimulus checks ,we might have expected large impacts on categories like automobile spending, electronics, appliances, and home furnishings,” according to economists at Columbia University, Northwestern University, the University of Chicago and the University of Southern Denmark.
“Instead, it seems that individuals are catching up with rent and bill payments as well as engaging in spending on food, personal care, and nondurables.”
It’s too soon to see what the stimulus checks accomplish for families and the economy as a whole, Columbia Business School Professor R. A. Farrokhnia, the study’s co-author, told MarketWatch. “What we can tell for fact is consumer behavior is different,” compared to their 2008 stimulus spending habits.
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