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dc.contributor.authorAmbler, Steve
dc.contributor.authorBouakez, Hafedh
dc.contributor.authorCardia, Emanuela
dc.date.accessioned2008-09-24T21:54:31Z
dc.date.available2008-09-24T21:54:31Z
dc.date.issued2008-09
dc.identifier.urihttp://hdl.handle.net/1866/2579
dc.format.extent439053 bytes
dc.format.mimetypeapplication/pdf
dc.publisherUniversité de Montréal. Département de sciences économiques.fr
dc.subjectOptimal public spendingen
dc.subjectBusiness cyclesen
dc.subjectCrowding inen
dc.subjectE2en
dc.subjectE3en
dc.subjectH3en
dc.titleThe Effect of Public Spending on Consumption: Reconciling Theory and Evidenceen
dc.typeArticleen
dc.contributor.affiliationUniversité de Montréal. Faculté des arts et des sciences. Département de sciences économiques
dcterms.abstractRecent empirical evidence from vector autoregressions (VARs) suggests that public spending shocks increase (crowd in) private consumption. Standard general equilibrium models predict the opposite. We show that a standard real business cycle (RBC) model in which public spending is chosen optimally can rationalize the crowding-in effect documented in the VAR literature. When such a model is used as a data-generating process, a VAR estimated using the artificial data yields a positive consumption response to an increase in public spending, consistent with the empirical findings. This result holds regardless of whether private and public purchases are complements or substitutes.en
dcterms.isPartOfurn:ISSN:0709-9231
dcterms.languageengen
UdeM.VersionRioxxVersion publiée / Version of Record
oaire.citationTitleCahier de recherche
oaire.citationIssue2008-11


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