Macroeconomic Models and the Determination of Crowding Out
AbstractThe ongoing controversy between crowding out and Ricardian equivalence has led many economists to estimate more sophisticated macroeconomic models. Such models can involve the governments budget constraint, the public capital hypothesis or the impact of government expenditures on private contributions to public goods. This paper demonstrates that such models often lead to the same reduced form equations with identical econometric results. However, the interpretation of these empirical results will depend crucially on the underlying model. It is concluded that the resolution of the crowding out controversy involves, in part, a better understanding of the structural foundations of the macroeconomic economy.
Download InfoTo our knowledge, this item is not available for download. To find whether it is available, there are three options:
1. Check below under "Related research" whether another version of this item is available online.
2. Check on the provider's web page whether it is in fact available.
3. Perform a search for a similarly titled item that would be available.
Bibliographic InfoArticle provided by in its journal Public Finance = Finances publiques.
Volume (Year): 54 (1999)
Issue (Month): 1-2 ()
Contact details of provider:
Other versions of this item:
- Lee C. Spector, 2005. "Macroeconomic Models and the Determination of Crowding Out," Working Papers 200511, Ball State University, Department of Economics, revised Mar 2006.
Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:
- Lee Spector & T. Cott, 1988. "Crowding out, deficits, and interest rates: Comment," Public Choice, Springer, vol. 58(1), pages 91-94, July.
- Randall W. Eberts, 1990. "Public infrastructure and regional economic development," Economic Review, Federal Reserve Bank of Cleveland, issue Q I, pages 15-27.
- Dalamagas, Basil A, 1987. "Government Deficits, Crowding Out, and Inflation: Some International Evidence," Public Finance = Finances publiques, , vol. 42(1), pages 65-84.
- Evans, Paul, 1985. "Do Large Deficits Produce High Interest Rates?," American Economic Review, American Economic Association, vol. 75(1), pages 68-87, March.
- Wachtel, Paul & Young, John, 1987. "Deficit Announcements and Interest Rates," American Economic Review, American Economic Association, vol. 77(5), pages 1007-12, December.
- Alicia H. Munnell, 1990. "Why has productivity growth declined? Productivity and public investment," New England Economic Review, Federal Reserve Bank of Boston, issue Jan, pages 3-22.
- Aschauer, David Alan, 1985. "Fiscal Policy and Aggregate Demand," American Economic Review, American Economic Association, vol. 75(1), pages 117-27, March.
- Turnovsky, Stephen J. & Fisher, Walter H., 1995. "The composition of government expenditure and its consequences for macroeconomic performance," Journal of Economic Dynamics and Control, Elsevier, vol. 19(4), pages 747-786, May.
- Keith M. Carlson & Roger W. Spencer, 1975. "Crowding out and its critics," Review, Federal Reserve Bank of St. Louis, issue Dec, pages 2-17.
- Pami Dua, 1993. "Interest Rates, Government Purchases, and Budget Deficits: a Forward-Looking Model," Public Finance Review, , vol. 21(4), pages 470-478, October.
- Andreoni, James, 1993.
"An Experimental Test of the Public-Goods Crowding-Out Hypothesis,"
American Economic Review,
American Economic Association, vol. 83(5), pages 1317-27, December.
- Cebula, Richard, 1986.
"Federal Deficits and the Real Rate of Interest in the United States: A Note,"
51626, University Library of Munich, Germany.
- Richard Cebula, 1987. "Federal deficits and the real rate of interest in the United States: A note," Public Choice, Springer, vol. 53(1), pages 97-100, January.
- Arthur C. Brooks, 2000. "Public subsidies and charitable giving: Crowding out, crowding in, or both?," Journal of Policy Analysis and Management, John Wiley & Sons, Ltd., vol. 19(3), pages 451-464.
- Williams, John C. & Levin, Andrew T. & Wieland, Volker, 2001.
"The performance of forecast-based monetary policy rules under model uncertainty,"
Working Paper Series
0068, European Central Bank.
- Andrew Levin & Volker Wieland & John C. Williams, 2003. "The Performance of Forecast-Based Monetary Policy Rules Under Model Uncertainty," American Economic Review, American Economic Association, vol. 93(3), pages 622-645, June.
- Andrew Levin & Volker Wieland & John Williams, 2000. "The Performance Of Forecast-Based Monetary Policy Rules Under Model Uncertainty," Computing in Economics and Finance 2000 203, Society for Computational Economics.
- Levin, Andrew & Wieland, Volker & Williams, John C., 2003. "The performance of forecast-based monetary policy rules under model uncertainty," CFS Working Paper Series 2003/06, Center for Financial Studies (CFS).
- Andrew Levin & John C. Williams, 2000. "The Performance of Forecast-Based Monetary Policy Rules under Model Uncertainty," Econometric Society World Congress 2000 Contributed Papers 1781, Econometric Society.
- Andrew Levin & Volker Wieland & John C. Williams, 2001. "The performance of forecast-based monetary policy rules under model uncertainty," Finance and Economics Discussion Series 2001-39, Board of Governors of the Federal Reserve System (U.S.).
- Kingma, Bruce Robert, 1989. "An Accurate Measurement of the Crowd-Out Effect, Income Effect, and Price Effect for Charitable Contributions," Journal of Political Economy, University of Chicago Press, vol. 97(5), pages 1197-1207, October.
- D. Giannaros & B. Kolluri & M. Panik, 1999. "An Empirical Analysis of The Effects of Government Spending on Capital Investment: Evidence from O.E.C.D. Countries," International Economic Journal, Taylor & Francis Journals, vol. 13(1), pages 45-55.
- Dasgupta, Dipankar & Itaya, Jun-ichi, 1992. "Comparative Statics for the Private Provision of Public Goods in a Conjectural Variations Model with Heterogeneous Agents," Public Finance = Finances publiques, , vol. 47(1), pages 17-31.
- Blinder, Alan S. & Solow, Robert M., 1973. "Does fiscal policy matter?," Journal of Public Economics, Elsevier, vol. 2(4), pages 319-337.
- Padoa Schioppa, Fiorella, 1984. "Public Expenditure in a Flexi-price Model," Public Finance = Finances publiques, , vol. 39(1), pages 133-48.
- Warr, Peter G., 1982. "Pareto optimal redistribution and private charity," Journal of Public Economics, Elsevier, vol. 19(1), pages 131-138, October.
- Kolluri, Bharat R. & Giannaros, Demetrios S., 1987. "Budget deficits and short-term real interest rate forecasting," Journal of Macroeconomics, Elsevier, vol. 9(1), pages 109-109.
- Turnovsky, Stephen J, 1975. "Monetary Policy, Fiscal Policy and the Government Budget Constraint," Australian Economic Papers, Wiley Blackwell, vol. 14(25), pages 197-215, December.
- James Tobin & Willem H. Buiter, 1974. "Long Run Effects of Fiscal and Monetary Policy on Aggregate Demand," Cowles Foundation Discussion Papers 384, Cowles Foundation for Research in Economics, Yale University.
- Roberts, Russell D, 1984. "A Positive Model of Private Charity and Public Transfers," Journal of Political Economy, University of Chicago Press, vol. 92(1), pages 136-48, February.
- Seater, John J, 1993. "Ricardian Equivalence," Journal of Economic Literature, American Economic Association, vol. 31(1), pages 142-90, March.
- Andreoni, James, 1989. "Giving with Impure Altruism: Applications to Charity and Ricardian Equivalence," Journal of Political Economy, University of Chicago Press, vol. 97(6), pages 1447-58, December.
- Saleh, Ali Salman, 2003. "The Budget Deficit and Economic Performance: A Survey," Economics Working Papers wp03-12, School of Economics, University of Wollongong, NSW, Australia.
- P.A.V.B. Swamy & Bharat R. Kolluri & Rao N. Singamesetti, 1988. "What do regressions of interest rates on deficits imply?," Finance and Economics Discussion Series 3, Board of Governors of the Federal Reserve System (U.S.).
For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Christopher F. Baum).
If references are entirely missing, you can add them using this form.