Private Sector Consumption Behavior and Non-Keynesian Effects of Fiscal Policy
28 Pages Posted: 15 Feb 2006
Date Written: August 1999
Abstract
This paper explores the hypothesis that the propensity to consume out of income is not constant but varies, perhaps in a nonlinear fashion, with fiscal variables. It examines whether there is any empirical evidence to support the hypothesis that households move from non-Ricardian to Ricardian behavior as government debt reaches high levels and as uncertainty about future taxes increases. The paper also examines the possibility of a relationship (along the lines of the Bertola-Drazen model) between the propensity to consume out of income and the government consumption-to-GDP ratio.
Keywords: fiscal policy government debt government consumption Ricardian behavior non-Keynesian effects
JEL Classification: E21 E62 H69
Suggested Citation: Suggested Citation
Do you have negative results from your research you’d like to share?
Recommended Papers
-
Fiscal Adjustments in OECD Countries: Composition and Macroeconomic Effects
-
Fiscal Adjustments in OECD Countries: Composition and Macroeconomic Effects
-
Can Severe Fiscal Contractions Be Expansionary? Tales of Two Small European Countries
By Francesco Giavazzi and Marco Pagano
-
Searching for Non-Linear Effects of Fiscal Policy: Evidence from Industrial and Developing Countries
By Francesco Giavazzi, Tullio Jappelli, ...
-
Fiscal Policy, Profits, and Investment
By Alberto F. Alesina, Silvia Ardagna, ...
-
Non-Keynesian Effects of Fiscal Policy Changes: International Evidence and the Swedish Experience
By Francesco Giavazzi and Marco Pagano
-
The Benefits of Crises for Economic Reforms
By Allan Drazen and Vittorio Grilli
-
Trigger Points and Budget Cuts: Explaining the Effects of Fiscal Austerity
By Giuseppe Bertola and Allan Drazen
-
Searching for Non-Keynesian Effects of Fiscal Policy
By Francesco Giavazzi, Tullio Jappelli, ...