In recent years, and during Covid-19 in particular, many countries have experimented with innovative approaches to fiscal stimulus. This column reports on an experiment in France in which individuals were given a debit card tied to a new bank account with an initial balance of €300, but with differing conditions. While certain groups, such as lower-income households, showed somewhat higher spending responses, the differences in spending caused by card design were much larger than differences across demographic groups, suggesting that the design of fiscal stimulus policies can strongly affect their impact on aggregate demand.
Johannes Boehm and Xavier Jaravel
16 November 2024
Vox EU
https://cepr.org/voxeu/columns/design-based-fiscal-stimulus-transfers-evidence-and-macro-implications
This work is published under POID and the CEP's Growth programme.