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Housework and fiscal expansions

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  • Gnocchi, Stefano
  • Hauser, Daniela
  • Pappa, Evi

Abstract

In an otherwise-standard business cycle model with housework, calibrated consistently with data on time use, we discipline complementarity between consumption and hours worked and relate its strength to the size of fiscal multipliers. Evidence on the substitutability between home and market goods confirms that complementarity is an empirically relevant driver of fiscal multipliers. However, in a housework model substantial complementarity can be generated without imposing a low wealth effect, which contradicts the microeconomic evidence. Also, explicitly modeling housework matters for assessing the welfare effects of government spending, which are understated by theories that neglect substitutability between home-produced and market goods.

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  • Gnocchi, Stefano & Hauser, Daniela & Pappa, Evi, 2016. "Housework and fiscal expansions," Journal of Monetary Economics, Elsevier, vol. 79(C), pages 94-108.
    • Handle: RePEc:eee:moneco:v:79:y:2016:i:c:p:94-108
    DOI: 10.1016/j.jmoneco.2016.04.003
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    Blog mentions

    As found by EconAcademics.org, the blog aggregator for Economics research:
    1. Housework and Fiscal Expansions
      by Christian Zimmermann in NEP-DGE blog on 2014-09-08 18:55:01

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    Cited by:

    1. Miyamoto, Wataru & Nguyen, Thuy Lan & Sheremirov, Viacheslav, 2019. "The effects of government spending on real exchange rates: Evidence from military spending panel data," Journal of International Economics, Elsevier, vol. 116(C), pages 144-157.
    2. Antonello D'Alessandro & Giulio Fella & Leonardo Melosi, 2019. "Fiscal Stimulus With Learning‐By‐Doing," International Economic Review, Department of Economics, University of Pennsylvania and Osaka University Institute of Social and Economic Research Association, vol. 60(3), pages 1413-1432, August.
    3. Tito Boeri & Juan F. Jimeno, 2015. "The unbearable divergence of unemployment in europe," Working Papers 1534, Banco de España;Working Papers Homepage.
    4. Alessio Moro & Omar Rachedi, 2018. "The changing structure of goverment consumption spending," Working Papers 1840, Banco de España;Working Papers Homepage.
    5. Moro, Alessio & Rachedi, Omar, 2018. "The Changing Structure of Government Spending," MPRA Paper 86577, University Library of Munich, Germany.
    6. Brueckner, Markus & Pappa, Evi & Valentinyi, Akos, 2019. "Local Autonomy and Government Spending Multipliers: Evidence from European Regions," CEPR Discussion Papers 14106, C.E.P.R. Discussion Papers.
    7. Henrique S. Basso & Omar Rachedi, 2018. "The young, the old, and the government: demographics and fiscal multipliers," Working Papers 1837, Banco de España;Working Papers Homepage.
    8. Christian Bredemeier, 2015. "Household Specialization and the Labor-Supply Elasticities of Women and Men," Working Paper Series in Economics 81, University of Cologne, Department of Economics.

    More about this item

    Keywords

    Government expenditure shocks; Home production;

    JEL classification:

    • E24 - Macroeconomics and Monetary Economics - - Consumption, Saving, Production, Employment, and Investment - - - Employment; Unemployment; Wages; Intergenerational Income Distribution; Aggregate Human Capital; Aggregate Labor Productivity
    • E32 - Macroeconomics and Monetary Economics - - Prices, Business Fluctuations, and Cycles - - - Business Fluctuations; Cycles
    • E52 - Macroeconomics and Monetary Economics - - Monetary Policy, Central Banking, and the Supply of Money and Credit - - - Monetary Policy
    • E62 - Macroeconomics and Monetary Economics - - Macroeconomic Policy, Macroeconomic Aspects of Public Finance, and General Outlook - - - Fiscal Policy

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