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Do fiscal variables affect private consumption? Evidence from Australia and the United States

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  • Mehdi Monadjemi

Abstract

This study examines the effect of fiscal measures on real private consumption using an error correction model. On balance, the empirical results of the study provided some evidence against the Ricardian equivalence hypothesis. In particular, responses to real government consumption and taxes in the United States and responses to real government debt and transfer payments in Australia were significant with their dynamic paths moving opposite to Ricardian proposition.

Suggested Citation

  • Mehdi Monadjemi, 1996. "Do fiscal variables affect private consumption? Evidence from Australia and the United States," Applied Economics Letters, Taylor & Francis Journals, vol. 3(6), pages 375-378.
    • Handle: RePEc:taf:apeclt:v:3:y:1996:i:6:p:375-378
    DOI: 10.1080/135048596356267
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    Cited by:

    1. repec:ebl:ecbull:v:5:y:2006:i:1:p:1-12 is not listed on IDEAS
    2. László Kónya & Bekzod Abdullaev, 2015. "Does Ricardian equivalence hold in Australia? A revision based on testing super exogeneity with impulse-indicator saturation," Empirical Economics, Springer, vol. 49(2), pages 423-448, September.
    3. Joe Stone & Jo Anna Gray, 2006. "Ricardian equivalence for sub-national states," Economics Bulletin, AccessEcon, vol. 5(1), pages 1-12.

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