Expansionary fiscal contractions? Evidence from panel data

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Title: Expansionary fiscal contractions? Evidence from panel data
Authors: Hogan, Vincent (Vincent Peter)
Permanent link: http://hdl.handle.net/10197/933
Date: Jan-2003
Abstract: We examine the ability of the Expansionary Fiscal Contraction (EFC) hypothesis to explain the performance of of OECD economies during times of crisis. We find some limited evidence in its favour: if public consumption is reduced in response to a fiscal crisis (as defined by a high level of debt), private consumption does seem to increase. However the size of the effect is smaller than that typically found in similar studies. Furthermore, the increase in private consumption is not usually sufficient to offset the direct effect of a reduction in the public consumption on output fiscal contractions are not literally expansionary.
Type of material: Working Paper
Publisher: University College Dublin. School of Economics
Copyright (published version): UCD School of Economics 2003
Keywords: ConsumptionSavingFiscal policy
Subject LCSH: Organisation for Economic Co-operation and Development
Fiscal policy
Saving and investment
Other versions: http://www.ucd.ie/economics/research/papers/2003/WP03.03.pdf
Language: en
Status of Item: Not peer reviewed
Appears in Collections:Economics Working Papers & Policy Papers

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