Advanced Search
MyIDEAS: Login

Private Sector Consumption and Government Consumption and Debt in Advanced Economies An Empirical Study

Contents:

Author Info

  • Sanchita Mukherjee
  • Rina Bhattacharya

Abstract

This paper explores the hypothesis that the propensity to consume out of income varies in a non-linear fashion with fiscal variables, and in particular with government debt per capita. Using data from eighteen OECD countries the paper 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. Our results provide support for this hypothesis, and also suggest that private and government consumption are substitutes in the household utility function.

Download Info

If you experience problems downloading a file, check if you have the proper application to view it first. In case of further problems read the IDEAS help page. Note that these files are not on the IDEAS site. Please be patient as the files may be large.
File URL: http://www.imf.org/external/pubs/cat/longres.aspx?sk=24369
Download Restriction: no

Bibliographic Info

Paper provided by International Monetary Fund in its series IMF Working Papers with number 10/264.

as in new window
Length: 27
Date of creation: 01 Nov 2010
Date of revision:
Handle: RePEc:imf:imfwpa:10/264

Contact details of provider:
Postal: International Monetary Fund, Washington, DC USA
Phone: (202) 623-7000
Fax: (202) 623-4661
Email:
Web page: http://www.imf.org/external/pubind.htm
More information through EDIRC

Order Information:
Web: http://www.imf.org/external/pubs/pubs/ord_info.htm

Related research

Keywords: Fiscal policy; Private consumption; Developed countries; Economic models; Fiscal consolidation; Income; Public debt; Sovereign debt; household income; marginal propensity to consume; aggregate demand; the marginal propensity to consume; fiscal adjustments; government spending; fiscal adjustment; fiscal consolidations; consumption function; budget constraint; fiscal contraction; fiscal variables; disposable income; consumption behavior; capital expenditure; consumption spending; fiscal deficits; tax increases; fiscal multipliers; consumption per capita; fiscal austerity; real per capita terms; fiscal crises; public debt reverse; fiscal affairs department; consumption increases; current expenditures; expansionary ? fiscal; expenditure cuts; household budget; fiscal affairs; fiscal contractions; fiscal problem; budget deficits; fiscal regime; fiscal expansions; permanent income; fiscal governance; substitution effect; fiscal effort; expansionary ? fiscal consolidations; tax burden; spending cuts; primary current expenditure; tax increase; labor income; current consumption; fiscal deficit;

This paper has been announced in the following NEP Reports:

References

No references listed on IDEAS
You can help add them by filling out this form.

Citations

Lists

This item is not listed on Wikipedia, on a reading list or among the top items on IDEAS.

Statistics

Access and download statistics

Corrections

When requesting a correction, please mention this item's handle: RePEc:imf:imfwpa:10/264. See general information about how to correct material in RePEc.

For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Jim Beardow) or (Hassan Zaidi).

If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

If references are entirely missing, you can add them using this form.

If the full references list an item that is present in RePEc, but the system did not link to it, you can help with this form.

If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your profile, as there may be some citations waiting for confirmation.

Please note that corrections may take a couple of weeks to filter through the various RePEc services.