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Fiscal policy and private consumption in industrial and developing countries

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  • Schclarek, Alfredo

Abstract

This paper empirically studies the effects of fiscal policy shocks on private consumption. Further, it tries to determine if the initial conditions of the economy, such as the financing needs of the government or previous fiscal deficits, affect that relationship. We use yearly data between 1970 and 2000 for forty countries, of which 19 are industrialized and 21 are developing countries. In general, the estimation results seem to indicate that government consumption shocks have Keynesian effects for both industrial and developing countries. In the case of tax shocks, the evidence is mixed. Furthermore, there is no evidence that favor the hypothesis of expansionary fiscal consolidations.
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Suggested Citation

  • Schclarek, Alfredo, 2007. "Fiscal policy and private consumption in industrial and developing countries," Journal of Macroeconomics, Elsevier, vol. 29(4), pages 912-939, December.
  • Handle: RePEc:eee:jmacro:v:29:y:2007:i:4:p:912-939
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    Cited by:

    1. BIKAI, J. Landry, 2015. "Fiscal Rules and Pro-cyclicality of the Fiscal Policy in CEMAC countries," MPRA Paper 78229, University Library of Munich, Germany.
    2. Carine Bouthevillain & John Caruana & Cristina Checherita & Jorge Cunha & Esther Gordo & Stephan Haroutunian & Geert Langenus & Amela Hubic & Bernhard Manzke & Javier J. Pérez & Pietro Tommasino, 2009. "Pros and cons of various fiscal measures to stimulate the economy," Economic Bulletin, Banco de España;Economic Bulletin Homepage, issue JUL, July.
    3. World Bank, 2007. "Tanzania - Sustaining and Sharing Economic Growth : Country Economic Memorandum and Poverty Assessment, Volume 1. Main Report," World Bank Other Operational Studies 7703, The World Bank.
    4. Kaya, Ayşe & Şen, Hüseyin, 2015. "Taxes and Private Consumption Expenditure: A Component Based Analysis for Turkey," MPRA Paper 61857, University Library of Munich, Germany, revised 20 Jan 2015.
    5. repec:spr:eurase:v:7:y:2017:i:3:d:10.1007_s40822-017-0072-2 is not listed on IDEAS
    6. Carmignani, Fabrizio, 2008. "The impact of fiscal policy on private consumption and social outcomes in Europe and the CIS," Journal of Macroeconomics, Elsevier, vol. 30(1), pages 575-598, March.
    7. Jérôme Creel & Bruno Ducoudré & Catherine Mathieu & Henri Sterdyniak, 2005. "Doit-on oublier la politique budgétaire ?. Une analyse critique de la nouvelle théorie anti-keynésienne des finances publiques," Revue de l'OFCE, Presses de Sciences-Po, vol. 92(1), pages 43-97.
    8. Robert J. Utz, 2007. "Sustaining and Sharing Economic Growth in Tanzania : Contents of CD Rom," World Bank Publications, The World Bank, number 6894.
    9. Fabrizio Carmignani, "undated". "Cyclical fiscal policy in developing countries: the case of Africa," MRG Discussion Paper Series 2408, School of Economics, University of Queensland, Australia.
    10. Bikai, Landry, 2010. "Les Effets Non Lineaires Des Deficits Budgetaires Sur L´Activite Economique En Cemac
      [Threshold Effects of Budgetary Policy on Economic Growth in Cemac]
      ," MPRA Paper 24524, University Library of Munich, Germany.
    11. Alfredo Schclarek, 2004. "Consumption and Keynesian Fiscal Policy," CESifo Working Paper Series 1310, CESifo Group Munich.
    12. Wissem Khanfir, 2016. "Threshold effect of fiscal policy on private consumption : Evidence from Tunisia," Romanian Economic Journal, Department of International Business and Economics from the Academy of Economic Studies Bucharest, vol. 18(59), pages 95-110, March.

    More about this item

    JEL classification:

    • C33 - Mathematical and Quantitative Methods - - Multiple or Simultaneous Equation Models; Multiple Variables - - - Models with Panel Data; Spatio-temporal Models
    • E21 - Macroeconomics and Monetary Economics - - Consumption, Saving, Production, Employment, and Investment - - - Consumption; Saving; Wealth
    • E62 - Macroeconomics and Monetary Economics - - Macroeconomic Policy, Macroeconomic Aspects of Public Finance, and General Outlook - - - Fiscal Policy

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