Calendrier du 27 octobre 2022
Travail et économie publique externe
Du 27/10/2022 de 12:30 à 13:30
PSE- 48 boulevard Jourdan, 74014 Paris, salle R2-01
ZWICK Eric (Chicago)
Stimulating Durable Purchases
écrit avec David Berger, Tianfang Cui, Nicholas Turner
What determines how durable purchases respond to fiscal and monetary stimulus? Though empirical studies show large responses to temporary subsidies for durable goods, the evidence is inconclusive on these policies’ stimulative effect net of reversal. We build a heterogeneous agent general equilibrium model in which durable takeup and adjustment decisions over the life cycle are lumpy and subject to financial constraints. We calibrate the model to match steady-state durable consumption patterns as well as quasi-experimental moments from homebuying subsidies. We then use the model to explore what drives stimulus reversal, to decompose reduced form responses of consumption to stimulus, and to evaluate the welfare benefits of alternative policies.
The model reconciles empirical results on temporary policies’ reversal, emphasizing how aggregate effects depend on the stimulated good’s durability and the timing of stimulus receipt. Heterogeneity affects aggregate responses to policies due to households facing binding financial constraints when buying durables, for whom temporary subsidies shift their medium-run durable purchase decisions. Whether policies precisely target downpayment constraints matters both for the magnitude of policy response and the composition of households that benefit from a given policy.
We use data from credit registers to develop out-of-sample tests of the model. The data reveal how different stimulus policies shift the age distribution of households who adjust to take advantage of a given policy. We propose alternative subsidy schedules that increase the level of durable expenditures stimulated per dollar spent. We also use the model to rank housing support policies, ranging from deductibility for mortgage interest to zoning reforms to unconditional cash transfers.