Fiscal Policy And The Composition Of Private Consumption: Some Evidence From The U.S. And Canada
This paper develops a generalized version of the life-cycle model in which consumers' preferences are defined over components of consumption and are affected by the level of public expenditure on goods and services. The model implies that the crowding out of private consumption could in fact be a direct demand side phenomenon caused by the way preferences respond to a change in public spending. Evidence from U.S. and Canadian data for the period 1935-1995 confirms this theoretical conjecture as well as implying that in both countries demand for durable goods is likely to show relatively large swings which may undermine the stability of the sector and harm the supply side. [E22. E62].
(This abstract was borrowed from another version of this item.)
|Date of creation:||Dec 2000|
|Date of revision:|
|Contact details of provider:|| Postal: |
Phone: (01382) 344375
Fax: (01382) 344691
Web page: http://www.dundee.ac.uk/econman/
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.:
- Dickey, David A & Fuller, Wayne A, 1981. "Likelihood Ratio Statistics for Autoregressive Time Series with a Unit Root," Econometrica, Econometric Society, vol. 49(4), pages 1057-72, June.
- Ni, Shawn, 1995. "An empirical analysis on the substitutability between private consumption and government purchases," Journal of Monetary Economics, Elsevier, vol. 36(3), pages 593-605, December.
- Modigliani, Franco & Sterling, Arlie, 1986. "Government Debt, Government Spending and Private Sector Behavior: Comment," American Economic Review, American Economic Association, vol. 76(5), pages 1168-79, December.
- Pantula, Sastry G & Gonzalez-Farias, Graciela & Fuller, Wayne A, 1994. "A Comparison of Unit-Root Test Criteria," Journal of Business & Economic Statistics, American Statistical Association, vol. 12(4), pages 449-59, October.
- Pesaran, M. H. & Shin, Y. & Smith, R. J., 1997.
"Structural Analysis of Vector Error Correction Models with Exogenous I(1) Variables,"
Cambridge Working Papers in Economics
9706, Faculty of Economics, University of Cambridge.
- Pesaran, M. Hashem & Shin, Yongcheol & Smith, Richard J., 2000. "Structural analysis of vector error correction models with exogenous I(1) variables," Journal of Econometrics, Elsevier, vol. 97(2), pages 293-343, August.
- James G. MacKinnon, 1992.
"Approximate Asymptotic Distribution Functions for Unit Roots and Cointegration Tests,"
861, Queen's University, Department of Economics.
- MacKinnon, James G, 1994. "Approximate Asymptotic Distribution Functions for Unit-Root and Cointegration Tests," Journal of Business & Economic Statistics, American Statistical Association, vol. 12(2), pages 167-76, April.
- Julia Darby & Jim Malley, 1994. "Fiscal Policy and Consumption: New Evidence from the United States," Working Papers Series 94/9, University of Stirling, Division of Economics.
- Martin Feldstein, 1980.
"Government Deficits and Aggregate Demand,"
NBER Working Papers
0435, National Bureau of Economic Research, Inc.
- Aschauer, David Alan, 1985. "Fiscal Policy and Aggregate Demand," American Economic Review, American Economic Association, vol. 75(1), pages 117-27, March.
- Molana, Hassan, 1997. "Consumption and Fiscal Policy: UK Evidence from a Cointegration Approach on Substitution between Private and Public Spending on Goods and Services," Empirical Economics, Springer, vol. 22(1), pages 63-81.
- Kormendi, Roger C, 1983. "Government Debt, Government Spending, and Private Sector Behavior," American Economic Review, American Economic Association, vol. 73(5), pages 994-1010, December.
- Johansen, Soren, 1988. "Statistical analysis of cointegration vectors," Journal of Economic Dynamics and Control, Elsevier, vol. 12(2-3), pages 231-254.
- Darby, Julia & Malley, Jim, 1996. "Fiscal Policy and Aggregate Consumption: New Evidence from the United States," Scottish Journal of Political Economy, Scottish Economic Society, vol. 43(2), pages 129-45, May.
- Molana, H, 1991. "The Time Series Consumption Function: Error Correction, Random Walk and the Steady-State," Economic Journal, Royal Economic Society, vol. 101(406), pages 382-403, May.
- Hall, Robert E, 1978. "Stochastic Implications of the Life Cycle-Permanent Income Hypothesis: Theory and Evidence," Journal of Political Economy, University of Chicago Press, vol. 86(6), pages 971-87, December.
When requesting a correction, please mention this item's handle: RePEc:dun:dpaper:113. 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: (Andrzej Kwiatkowski)
If references are entirely missing, you can add them using this form.