Fiscal policy and the composition of private consumption: some evidence from the U.S. and Canada

Malley, J. and Molana, H. (2002) Fiscal policy and the composition of private consumption: some evidence from the U.S. and Canada. International Economic Journal, 16(1), pp. 139-158. (doi:10.1080/10168730200000008)

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Abstract

This paper develops a generalized version of the life-cycle model in which consumers' preferences are defined over components of consumption and are affected by the level of public expenditure on goods and services. The model implies that the crowding out of private consumption could in fact be a direct demand side phenomenon caused by the way preferences respond to a change in public spending. Evidence from U.S. and Canadian data for the period 1935-1995 confirms this theoretical conjecture as well as implying that in both countries demand for durable goods is likely to show relatively large swings which may undermine the stability of the sector and harm the supply side

Item Type:Articles
Status:Published
Refereed:Yes
Glasgow Author(s) Enlighten ID:Malley, Professor Jim
Authors: Malley, J., and Molana, H.
Subjects:H Social Sciences > HB Economic Theory
College/School:College of Social Sciences > Adam Smith Business School > Economics
Journal Name:International Economic Journal
ISSN:1016-8737
ISSN (Online):1743-517X

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