Fiscal Policy And The Composition Of Private Consumption: Some Evidence From The U.S. And Canada
AbstractThis paper develops a generalised version of the life-cycle model in which consumersâ preferences are defined over components of consumption and are affected by the level of public expenditure on goods and services. The model implies that the crowding out of private consumption could in fact be a direct demand side phenomenon caused by the way preferences respond to a change in public spending. Evidence from U.S. and Canadian data for the period 1935-1995 confirms this theoretical conjecture as well as implying that in both countries demand for durable goods is likely to show relatively large swings which may undermine the stability of the sector and harm the supply side.
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Bibliographic InfoPaper provided by Economic Studies, University of Dundee in its series Dundee Discussion Papers in Economics with number 113.
Date of creation: Dec 2000
Date of revision:
Other versions of this item:
- Malley Jim & Molana Hassan, 2002. "Fiscal Policy And The Composition Of Private Consumption: Some Evidence From The U.A. And Canada," International Economic Journal, Korean International Economic Association, vol. 16(1), pages 139-158.
- Jim Malley & Hassan Molana, 1998. "Fiscal Policy and the Composition of Private Consumption: Some Evidence from the U.S. and Canada," Working Papers 9804, Business School - Economics, University of Glasgow.
- Jim Malley & Hassan Molana, . "Fiscal Policy and the Composition of Private Consumption: Some Evidence from the U.S. and Canada," EPRU Working Paper Series 99-14, Economic Policy Research Unit (EPRU), University of Copenhagen. Department of Economics.
- E22 - Macroeconomics and Monetary Economics - - Macroeconomics: Consumption, Saving, Production, Employment, and Investment - - - Capital; Investment; Capacity
- E62 - Macroeconomics and Monetary Economics - - Macroeconomic Policy, Macroeconomic Aspects of Public Finance, and General Outlook - - - Fiscal Policy
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