Inflationary Effects of Fiscal Support to Households and Firms / Galina Hale, John C. Leer, Fernanda Nechio.

Format:

Book

Author/Creator:

Hale, Galina.

Contributor:

National Bureau of Economic Research.

Leer, John C.

Nechio, Fernanda.

Series:

Working Paper Series (National Bureau of Economic Research) no. w30906.

NBER working paper series no. w30906

Language:

English

Physical Description:

1 online resource: illustrations (black and white);

Place of Publication:

Cambridge, Mass. National Bureau of Economic Research 2023.

Summary:

Fiscal support measures in response to the COVID-19 pandemic varied in their targeted beneficiaries. Relying on variability across 10 large economies, we study differences in the inflationary effects of fiscal support measures targeting consumers or businesses. Because conventional measures of real activity were distorted, we control for the underlying state of the real economy using households sentiment data. We find that fiscal support measures to consumers, but not firms, had inflationary effects that manifested 5 weeks following the announcement and peaked at 12 weeks. The magnitude of the effect was larger in an environment of improving consumer sentiment.

Notes:

Print version record

January 2023.