Fiscal Policy Regimes and Household Consumption

Arbeitspapier

In this paper, we study the effects of fiscal policy during different fiscal policy regimes. More specifically, we investigate how different factors, such as size, duration and composition of fiscal changes, can alter the effects of fiscal policy on private consumption. Using an unbalanced panel of 19 OECD countries during the period 1960-2000, we find that transfer changes are believed to be permanent during fiscal contractions. Hence, it is more likely that an expansionary fiscal contraction will occur if the government cuts transfers. Our results highlight the importance of accounting for specific circumstances, such as the debt and deficit position, when studying expansionary fiscal contractions. The results also indicate that expansionary fiscal contractions are likely to come at a considerable social cost.

Object Details

• Language: Englisch

References and Relationships

• Bibliographic citation: Series: Working Paper ; No. 2004:12

Classification and Topics

• Classification: Wirtschaft ; Single Equation Models; Single Variables: Panel Data Models; Spatio-temporal Models ; Macroeconomics: Consumption; Saving; Wealth ; Fiscal Policy ; Fiscal Policies and Behavior of Economic Agents: Household
• Subject: Panel data ; Household consumption ; Fiscal policy ; Non-Keynesian effects

Contributors, Places and Time

• Event: Geistige Schöpfung
• (who): Jönsson, Kristian
• Event: Veröffentlichung
• (who): Lund University, School of Economics and Management, Department of Economics
• (where): Lund
• (when): 2004

Further information

• Handle: http://hdl.handle.net/10419/259885
• Last update: 10.03.2025, 11:41 AM CET