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The Effects of Government Spending Shocks on Consumption under Optimal Stabilization
| Content Provider | Semantic Scholar |
|---|---|
| Author | Horváth, Michal |
| Copyright Year | 2009 |
| Abstract | Economic theory has yet to come up with a general guidance regarding the dynamic effects and welfare implications of shocks to public spending. With the aim to provide a theoretical benchmark, we analyse if a rise in private consumption following an exogenous rise in government spending is a feature of the economy under optimal stabilization in a standard New Keynesian setting augmented for the presence of liquidity-constrained agents and non-separable preferences. Our results provide little evidence in support of a crowding-in effect under 'timelessly optimal' policy. |
| Starting Page | 815 |
| Ending Page | 829 |
| Page Count | 15 |
| File Format | PDF HTM / HTML |
| DOI | 10.1016/j.euroecorev.2009.01.004 |
| Volume Number | 53 |
| Alternate Webpage(s) | http://www.utm.edu/staff/davidt/finance/ISLM/wp0805.pdf |
| Alternate Webpage(s) | https://doi.org/10.1016/j.euroecorev.2009.01.004 |
| Language | English |
| Access Restriction | Open |
| Content Type | Text |
| Resource Type | Article |
