GOVERNMENT SPENDING, ENTRY, AND THE CONSUMPTION CROWDING-IN PUZZLE

• 成果类型: Article
• 署名作者: Lewis, Vivien; Winkler, Roland
• 署名单位: KU Leuven; Deutsche Bundesbank; Dortmund University of Technology
• 刊物名称: INTERNATIONAL ECONOMIC REVIEW
• ISSN/ISSBN: 0020-6598
• DOI: 10.1111/iere.12241
• 发表日期: 2017
• 页码: 943-972
• 关键词: business-cycle; fiscal-policy; private consumption; monopolistic competition; transmission mechanism; monetary-policy; Firm entry; shocks; returns; output

摘要

This article documents empirically that net firm entry robustly rises after a U.S. government spending expansion. We use this new finding to test the empirical validity of various model features that have been proposed to generate consumption crowding-in after positive expenditure shocks. Endogenous-entry models typically fail to generate the observed joint increase in consumption and entry. Model features that dampen the wealth effect, such as rule-of-thumb households or complementarity between labor and consumption in preferences, tend to reduce entry. We show that utility- or productivity-enhancing public spending can reconcile the model with our documented fact and performs well empirically.