{
  "title": "Private Sector Consumption Behavior and Non-Keynesian Effects of Fiscal Policy",
  "publication": "IMF Working Papers, August 1, 1999",
  "sourceUrl": "https://www.imf.org/en/publications/wp/issues/2016/12/30/private-sector-consumption-behavior-and-non-keynesian-effects-of-fiscal-policy-3253",
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  "summary": "This paper explores the hypothesis that the propensity to consume out of income is not constant but varies, perhaps in a nonlinear fashion, with fiscal variables.",
  "sections": [
    {
      "heading": "Overview",
      "content": "- Examines the hypothesis that the propensity to consume out of income is not constant but varies, perhaps in a nonlinear fashion, with fiscal variables.\n- Investigates whether households move from non-Ricardian to Ricardian behavior as government debt reaches high levels and as uncertainty about future taxes increases.\n- Explores a possible relationship, along the lines of the Bertola-Drazen model, between the propensity to consume out of income and the government consumption-to-GDP ratio."
    },
    {
      "heading": "Research questions and hypotheses",
      "content": "- Does the propensity to consume out of income vary with fiscal variables?\n- Is there empirical evidence that households transition from non-Ricardian to Ricardian behavior when:\n  - government debt reaches high levels, and/or\n  - uncertainty about future taxes increases?\n- Is there a relationship between the propensity to consume out of income and the government consumption-to-GDP ratio consistent with the Bertola-Drazen model?"
    },
    {
      "heading": "Methods (as described)",
      "content": "- Uses empirical analysis and panel data estimation technique (keyword listed: panel data estimation technique).\n- Focuses on consumption behavior relative to fiscal variables such as government debt and government consumption-to-GDP ratio."
    },
    {
      "heading": "Key findings (summary of the paper’s investigative focus)",
      "content": "- The paper explores nonlinear variation in the propensity to consume out of income in response to fiscal variables.\n- Investigates potential behavioral shift from non-Ricardian to Ricardian household behavior associated with high government debt and increased tax uncertainty.\n- Examines the possibility of a relationship between propensity to consume out of income and the government consumption-to-GDP ratio in line with the Bertola-Drazen model."
    },
    {
      "heading": "Subject areas and keywords",
      "content": "- Subject: Consumption, Expenditure, Government consumption, Income, National accounts, Private consumption, Public debt\n- Keywords: debt stabilization programme, fiscal policy, GDP ratio, government, government consumption, government debt, household income, Income, non-Keynesian effects, panel data estimation technique, Private consumption, Ricardian behavior, WP\n\n---\n\n Content in this bundle\n\n- Private Sector Consumption Behavior and Non-Keynesian Effects of Fiscal Policy - WP/99/112\n  - Private Sector Consumption Behavior and Non-Keynesian Effects of Fiscal Policy - WP/99/112 (Markdown version){rel=\"alternate\" type=\"text/markdown\"}\n  - Private Sector Consumption Behavior and Non-Keynesian Effects of Fiscal Policy - WP/99/112 (PDF){rel=\"external\" type=\"application/pdf\"}\n\n---\n\nSource: https://www.imf.org/en/publications/wp/issues/2016/12/30/private-sector-consumption-behavior-and-non-keynesian-effects-of-fiscal-policy-3253"
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    "Authors: Rina Bhattacharya",
    "Published: August 1, 1999",
    "Series: IMF Working Papers",
    "DOI: https://doi.org/10.5089/9781451853582.001",
    "Examines the hypothesis that the propensity to consume out of income is not constant but varies, perhaps in a nonlinear fashion, with fiscal variables.",
    "Investigates whether households move from non-Ricardian to Ricardian behavior as government debt reaches high levels and as uncertainty about future taxes increases.",
    "Explores a possible relationship, along the lines of the Bertola-Drazen model, between the propensity to consume out of income and the government consumption-to-GDP ratio.",
    "Does the propensity to consume out of income vary with fiscal variables?",
    "Is there empirical evidence that households transition from non-Ricardian to Ricardian behavior when:",
    "Is there a relationship between the propensity to consume out of income and the government consumption-to-GDP ratio consistent with the Bertola-Drazen model?",
    "Uses empirical analysis and panel data estimation technique (keyword listed: panel data estimation technique).",
    "Focuses on consumption behavior relative to fiscal variables such as government debt and government consumption-to-GDP ratio.",
    "The paper explores nonlinear variation in the propensity to consume out of income in response to fiscal variables.",
    "Investigates potential behavioral shift from non-Ricardian to Ricardian household behavior associated with high government debt and increased tax uncertainty.",
    "Examines the possibility of a relationship between propensity to consume out of income and the government consumption-to-GDP ratio in line with the Bertola-Drazen model.",
    "Subject: Consumption, Expenditure, Government consumption, Income, National accounts, Private consumption, Public debt",
    "Keywords: debt stabilization programme, fiscal policy, GDP ratio, government, government consumption, government debt, household income, Income, non-Keynesian effects, panel data estimation technique, Private consumption, Ricardian behavior, WP",
    "**Private Sector Consumption Behavior and Non-Keynesian Effects of Fiscal Policy - WP/99/112**"
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