S-WoPEc
 
Scandinavian Working Papers in Economics
HomeAboutSeriesSubject/JEL codesAdvanced Search
Department of Economics, Lund University Working Papers, Department of Economics, Lund University

No 2000:2:
The 'Expansionary Fiscal Contraction Hypothesis' and Uncertainty About the Permanence of Fiscal Consolidations

Michael Bergman ()

Abstract: This paper contrasts the effects of balanced-budget reductions in government consumption on private consumption in the permanent income model and a model allowing for precautionary savings. We compare impulse responses of private consumption to temporary and permanent shocks to government consumption when agents do not observe the shocks directly or can distinguish between temporary and permanent shocks. Our simulations suggest that uncertainty about the permanence of government consumption reductions affect both the impact and the duration of private consumption whereas precautionary saving motives only affect the impact.

Keywords: Expansionary fiscal contraction; fiscal consolidations; uncertainty; precautionary savings; (follow links to similar papers)

JEL-Codes: E21; E62; (follow links to similar papers)

21 pages, March 6, 2000

Before downloading any of the electronic versions below you should read our statement on copyright.
Download GhostScript for viewing Postscript files and the Acrobat Reader for viewing and printing pdf files.

Full text versions of the paper:

lunewp2000_002.ps.zip    PKZipped PostScript (1.01MB) 
lunewp2000_002.ps    PostScript file (2.47MB) 
lunewp2000_002.pdf.zip    PDF-file (zipped) (343kB) 
lunewp2000_002.pdf    PDF-file (366kB) 
Download Statistics

Questions (including download problems) about the papers in this series should be directed to David Edgerton ()
Report other problems with accessing this service to Sune Karlsson () or Helena Lundin ().

Programing by
Design by Joachim Ekebom

Handle: RePEc:hhs:lunewp:2000_002 This page was generated on 2014-12-14 19:24:48