Format:
Online-Ressource (37 p)
Edition:
Online-Ausg.
ISBN:
1451861788
,
9781451861785
Series Statement:
IMF Working Papers Working Paper No. 05/159
Content:
In this paper, we revisit the effects of government spending shocks on private consumption within an estimated New-Keynesian DSGE model of the euro area featuring non-Ricardian households. Employing Bayesian inference methods, we show that the presence of non- Ricardian households is in general conducive to raising the level of consumption in response to government spending shocks when compared with the benchmark specification without non-Ricardian households. However, we find that there is only a fairly small chance that government spending shocks crowd in consumption, mainly because the estimated share of non-Ricardian households is relatively low, but also because of the large negative wealth effect induced by the highly persistent nature of government spending shocks
Additional Edition:
Erscheint auch als Druck-Ausgabe Coenen, Günter Does Government Spending Crowd In Private Consumption? Theory and Empirical Evidence for the Euro Area Washington, D.C. : International Monetary Fund, 2005 ISBN 9781451861785
Language:
English
DOI:
10.5089/9781451861785.001
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