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:
Online Access:
Collection: International Monetary Fund - Collection details see MPG.ReNa
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100 1 |a Bhattacharya, Rina 
245 0 0 |a Private Sector Consumption Behavior and Non-Keynesian Effects of Fiscal Policy  |c Rina Bhattacharya 
260 |a Washington, D.C.  |b International Monetary Fund  |c 1999 
300 |a 28 pages 
651 4 |a United States 
653 |a Wealth 
653 |a Economics 
653 |a Public debt 
653 |a Income 
653 |a Private consumption 
653 |a Public finance & taxation 
653 |a Saving 
653 |a Government consumption 
653 |a Debt Management 
653 |a Fiscal Policy 
653 |a Debts, Public 
653 |a Debt 
653 |a Aggregate Factor Income Distribution 
653 |a National accounts 
653 |a National Government Expenditures and Related Policies: General 
653 |a Sovereign Debt 
653 |a Expenditure 
653 |a National Budget, Deficit, and Debt: Other 
653 |a Consumption 
653 |a Expenditures, Public 
653 |a Macroeconomics 
653 |a Macroeconomics: Consumption 
653 |a Public Finance 
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989 |b IMF  |a International Monetary Fund 
490 0 |a IMF Working Papers 
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082 0 |a 330 
520 |a 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