Scandinavian Working Papers in Economics
Working Papers,
Lund University, Department of Economics
No 2003:3: Public debt and the effects of government expenditure on private consumption - A Kalman filter analysis of the Swedish experience 1970-1997
Martin Johansson and Kristian Jönsson ()
Additional contact information
Martin Johansson: Department of Economics, Lund University, Postal: Department of Economics, School of Economics and Management, Lund University, Box 7082, S-220 07 Lund, Sweden
Kristian Jönsson: Sveriges Riksbank, Postal: Macroprudential Division, Financial Stability Department, Sveriges Riksbank, SE-103 37 Stockholm, Sweden,
Abstract: Recently, it has been suggested that the effect of government expenditure on private consumption is dependent on the level of public debt. More specifically, a higher public debt implies a less Keynesian response in private consumption. In this paper we investigate if this theory is supported by Swedish data 1970-1997 by estimating a consumption function allowing for time-varying parameters. Our main finding is that the effect of government expenditure has become less Keynesian over time. This coincides with a large increase in public debt, lending support to the theoretical predictions.
Keywords: Government expenditure; private consumption; time-varying parameters
18 pages, April 3, 2003
Full text files
WP03_3.pdf
Questions (including download problems) about the papers in this series should be directed to Iker Arregui Alegria ()
Report other problems with accessing this service to Sune Karlsson ().
RePEc:hhs:lunewp:2003_003This page generated on 2024-09-13 22:16:09.