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Private Sector Consumption Behavior and Non-Keynesian Effects of Fiscal Policy

This paper explores the hypothesis that the propensity to consume out of income is not constant but varies, perhaps in a nonlinear fashion, with fiscal variables. It examines whether there is any empirical evidence to support the hypothesis that households move from non-Ricardian to Ricardian behavi...

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Bibliographic Details
Main Author: Bhattacharya, Rina
Format: eBook
Language:English
Published: Washington, D.C. International Monetary Fund 1999
Series:IMF Working Papers
Subjects:
Wealth
Public Debt
Income
Private Consumption
Public Finance & Taxation
Saving
Government Consumption
Debt Management
Debts, Public
Fiscal Policy
Debt
Aggregate Factor Income Distribution
National Accounts
National Government Expenditures And Related Policies: General
Expenditure
Sovereign Debt
Consumption; Economics
National Budget, Deficit, And Debt: Other
Expenditures, Public
Consumption
Macroeconomics
Macroeconomics: Consumption
Public Finance
United States
Online Access:
Collection: International Monetary Fund - Collection details see MPG.ReNa
Description
Summary:This paper explores the hypothesis that the propensity to consume out of income is not constant but varies, perhaps in a nonlinear fashion, with fiscal variables. It examines whether there is any empirical evidence to support the hypothesis that households move from non-Ricardian to Ricardian behavior as government debt reaches high levels and as uncertainty about future taxes increases. The paper also examines the possibility of a relationship (along the lines of the Bertola-Drazen model) between the propensity to consume out of income and the government consumption-to-GDP ratio
Physical Description:28 pages
ISBN:9781451853582

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