Understanding the effects of government spending on consumption

• 成果类型: Article
• 署名作者: Gali, Jordi; Valles, Javier; Lopez-Salido, J. David
• 刊物名称: JOURNAL OF THE EUROPEAN ECONOMIC ASSOCIATION
• ISSN/ISSBN: 1542-4766
• DOI: 10.1162/JEEA.2007.5.1.227
• 发表日期: 2007
• 页码: 227-270
• 关键词: monetary-policy; household consumption; fiscal-policy; BEHAVIOR; prices; money; MODEL; shock

摘要

Recent evidence suggests that consumption rises in response to an increase in government spending. That finding cannot be easily reconciled with existing optimizing business cycle models. We extend the standard new Keynesian model to allow for the presence of rule-of-thumb consumers. We show how the interaction of the latter with sticky prices and deficit financing can account for the existing evidence on the effects of govemment-spending.