Private and Public Consumption and Counter-Ciclical Fiscal Policy
This paper bulds a closed-economy NK-DSGE model with no capital, in which consumers value both private and public consumption and fiscal policy is determined by a feedback rule responding to output gap. We analyse how different degrees of substitutatibility/complementarity between private and public consumption and a pro/counter-cyclical stance of fiscal policy affect equilbrium determinacy and the response of the economy to a wide range of shocks. Results show that determinacy is ensured by counter-cyclical fiscal policy under complementarity; increasing substitutability also pro-cyclical stance becomes stable. Differences can be observed also in response to shocks.
(This abstract was borrowed from another version of this item.)
|Date of creation:||Apr 2007|
|Date of revision:|
|Contact details of provider:|| Postal: |
Phone: +39 051 209 8019 and 2600
Fax: +39 051 209 8040 and 2664
Web page: http://www.dse.unibo.it
More information through EDIRC
Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:
- Graham, Fred C & Himarios, Daniel, 1991. "Fiscal Policy and Private Consumption: Instrumental Variables Tests of the "Consolidated Approach."," Journal of Money, Credit and Banking, Blackwell Publishing, vol. 23(1), pages 53-67, February.
- Fiorito, Riccardo & Kollintzas, Tryphon, 2004.
"Public goods, merit goods, and the relation between private and government consumption,"
European Economic Review,
Elsevier, vol. 48(6), pages 1367-1398, December.
- Fiorito, Riccardo & Kollintzas, Tryphon, 2002. "Public Goods, Merit Goods, and the Relation Between Private and Government Consumption," CEPR Discussion Papers 3617, C.E.P.R. Discussion Papers.
- King, R.G. & Baxter, M., 1990.
"Fiscal Policy In General Equilibrium,"
RCER Working Papers
244, University of Rochester - Center for Economic Research (RCER).
- Balassone, F. & Manacelli, D., 2000.
"Emu Fiscal Rules: is There a Gap?,"
375, Banca Italia - Servizio di Studi.
- Coricelli, Fabrizio & Ercolani, Valerio, 2002. "Cyclical and Structural Deficits on the Road to Accession: Fiscal Rules for an Enlarged European Union," CEPR Discussion Papers 3672, C.E.P.R. Discussion Papers.
- Nooman Rebei & Hafedh Bouakez, 2004.
"Why Does Private Consumption Rise After a Government Spending Shock?,"
Computing in Economics and Finance 2004
20, Society for Computational Economics.
- Hafedh Bouakez & Nooman Rebei, 2007. "Why does private consumption rise after a government spending shock?," Canadian Journal of Economics, Canadian Economics Association, vol. 40(3), pages 954-979, August.
- Nooman Rebei & Hafedh Bouakez, 2004. "Why Does Private Consumption Rise After a Government Spending Shock?," Econometric Society 2004 North American Summer Meetings 417, Econometric Society.
- Hafedh Bouakez & Nooman Rebei, 2003. "Why Does Private Consumption Rise After a Government Spending Shock?," Working Papers 03-43, Bank of Canada.
- Devereux, Michael B & Head, Allen C & Lapham, Beverly J, 1996. "Monopolistic Competition, Increasing Returns, and the Effects of Government Spending," Journal of Money, Credit and Banking, Blackwell Publishing, vol. 28(2), pages 233-54, May.
- Robert A. Amano & Tony S. Wirjanto, 1997. "Intratemporal Substitution And Government Spending," The Review of Economics and Statistics, MIT Press, vol. 79(4), pages 605-609, November.
When requesting a correction, please mention this item's handle: RePEc:bol:bodewp:588. 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: (Luca Miselli)
If references are entirely missing, you can add them using this form.