IDEAS home Printed from https://ideas.repec.org/p/hhs/lunewp/2004_026.html
   My bibliography  Save this paper

Effective Consumption and Non-Keynesian Effects of Fiscal Policy

Author

Listed:
  • Jönsson, Kristian

    () (Sveriges Riksbank)

Abstract

In this paper, we elaborate on the notion of effective consumption and its role in determining the outcome of fiscal changes. More specifically, we investigate whether government consumption, by acting either as a complement or a substitute to private consumption, can help explain the non-Keynesian effects of fiscal policy that have been previously documented. We let the periods, where government consumption has acted as a complement or a substitute to private consumption, constitute different regimes. By using econometric methodologies that allow the these regimes to be determined both exogenously and endogenously, we find that the notion of effective consumption can assist in understanding the non-Keynesian effects of fiscal policy that have been documented in Denmark, Ireland and Sweden.

Suggested Citation

  • Jönsson, Kristian, 2004. "Effective Consumption and Non-Keynesian Effects of Fiscal Policy," Working Papers 2004:26, Lund University, Department of Economics.
  • Handle: RePEc:hhs:lunewp:2004_026
    as

    Download full text from publisher

    File URL: http://project.nek.lu.se/publications/workpap/Papers/WP04_26.pdf
    Download Restriction: no

    References listed on IDEAS

    as
    1. Francesco Giavazzi & Marco Pagano, 1990. "Can Severe Fiscal Contractions Be Expansionary? Tales of Two Small European Countries," NBER Chapters,in: NBER Macroeconomics Annual 1990, Volume 5, pages 75-122 National Bureau of Economic Research, Inc.
    2. Alberto Alesina & Roberto Perotti, 1995. "Fiscal Expansions and Fiscal Adjustments in OECD Countries," NBER Working Papers 5214, National Bureau of Economic Research, Inc.
    3. Francesco Giavazzi & Marco Pagano, 1995. "Non-Keynesian Effects of Fiscal Policy Changes: International Evidence and the Swedish Experience," NBER Working Papers 5332, National Bureau of Economic Research, Inc.
    4. Barro, Robert J, 1981. "Output Effects of Government Purchases," Journal of Political Economy, University of Chicago Press, vol. 89(6), pages 1086-1121, December.
    5. Ho, Tsung-wu, 2001. "The government spending and private consumption: a panel cointegration analysis," International Review of Economics & Finance, Elsevier, vol. 10(1), pages 95-108.
    6. Goffe, William L. & Ferrier, Gary D. & Rogers, John, 1994. "Global optimization of statistical functions with simulated annealing," Journal of Econometrics, Elsevier, vol. 60(1-2), pages 65-99.
    7. Alberto Alesina & Roberto Perotti, 1996. "Fiscal Adjustments in OECD Countries: Composition and Macroeconomic Effects," NBER Working Papers 5730, National Bureau of Economic Research, Inc.
    8. Graham, Fred C, 1993. "Fiscal Policy and Aggregate Demand: Comment," American Economic Review, American Economic Association, vol. 83(3), pages 659-666, June.
    9. White, Halbert, 1982. "Maximum Likelihood Estimation of Misspecified Models," Econometrica, Econometric Society, vol. 50(1), pages 1-25, January.
    10. Ardagna, Silvia & Alesina, Alberto, 1998. "Tales of Fiscal Adjustment," Scholarly Articles 2579822, Harvard University Department of Economics.
    11. Alberto Alesina & Silvia Ardagna, 1998. "Tales of fiscal adjustment," Economic Policy, CEPR;CES;MSH, vol. 13(27), pages 487-545, October.
    12. António Afonso, 2001. "Non-Keynesian Effects of Fiscal Policy in the EU-15," Working Papers Department of Economics 2001/07, ISEG - Lisbon School of Economics and Management, Department of Economics, Universidade de Lisboa.
    13. J. Huston McCulloch, 1977. "The Austrian Theory of the Marginal Use And of Ordinal Marginal Utility," NBER Working Papers 0170, National Bureau of Economic Research, Inc.
    14. Evans, Paul & Karras, Georgios, 1996. "Private and government consumption with liquidity constraints," Journal of International Money and Finance, Elsevier, vol. 15(2), pages 255-266, April.
    15. Hayashi, Fumio, 1982. "The Permanent Income Hypothesis: Estimation and Testing by Instrumental Variables," Journal of Political Economy, University of Chicago Press, vol. 90(5), pages 895-916, October.
    Full references (including those not matched with items on IDEAS)

    More about this item

    Keywords

    Private Consumption; Fiscal Policy; Government Consumption;

    JEL classification:

    • 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

    NEP fields

    This paper has been announced in the following NEP Reports:

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:hhs:lunewp:2004_026. 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: (David Edgerton). General contact details of provider: http://edirc.repec.org/data/delunse.html .

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service hosted by the Research Division of the Federal Reserve Bank of St. Louis . RePEc uses bibliographic data supplied by the respective publishers.