Universal Cash Transfers and Inflation

Abstract

By stimulating consumer spending, unconditional cash transfers may increase price levels. In Alaska, residents have received an unconditional cash transfer every year since 1982: the Alaska Permanent Fund Dividend. We measure the impact of the dividend using a synthetic control method, which matches Alaska with similar states prior to the introduction of the dividend. The method does not find a good control group for Alaska, likely because of unusual inflation dynamics around 1982. While there is suggestive evidence of positive inflation and price effects, much uncertainty remains regarding the causal effect of unconditional cash transfers on Alaskan inflation and prices.