This paper analyzes the dynamic impact of discretionary government consumption purchases on private demand. Using a panel of 132 countries from 1960 to 2008, we find that while discretionary changes in government consumption lead to crowding-in effects in the short run, crowding-out effects take over in the medium run. In addition, we also find that both short-term crowding-in and mediumterm crowding out effects are amplified once we control for periods of crisis.
Agnello, L., Furceri, D., Sousa, R. (2013). Discretionary government consumption, private domestic demand, and crisis episodes. OPEN ECONOMIES REVIEW, 24(1), 79-100 [10.1007/s11079-012-9256-2].
Discretionary government consumption, private domestic demand, and crisis episodes
AGNELLO, Luca;FURCERI, Davide;
2013-01-01
Abstract
This paper analyzes the dynamic impact of discretionary government consumption purchases on private demand. Using a panel of 132 countries from 1960 to 2008, we find that while discretionary changes in government consumption lead to crowding-in effects in the short run, crowding-out effects take over in the medium run. In addition, we also find that both short-term crowding-in and mediumterm crowding out effects are amplified once we control for periods of crisis.I documenti in IRIS sono protetti da copyright e tutti i diritti sono riservati, salvo diversa indicazione.