The impact of temporary tax changes on consumption: 2000-2015

This paper provides estimates of the impact of fiscal policy induced temporary increases in disposable income (TIDI) on personal consumption expenditures from 2000 to 2015. The regression analysis suggests an economically large impact of TIDI on consumption. The interpretations of the results as casual depends on the plausibility of the argument that fiscal policy changes were at least partly exogenous to contemporaneous shocks to personal consumption expenditures.