Understanding the effects of government spending on consumption
By: Jordi Gali, J. David Lopez-Salido, Javier Valles.
Contributors: Lopez-Salido, J. David.; Valles, Javier.
Series: International finance discussion papers ;; no. 805; International finance discussion papers (Online) ;; no. 805.
Publisher: Federal Reserve Board
Published: 2004
Place of publication: Washington, D.C
Language: eng
Format: Electronic resource
Description: "Recent evidence on the effect of government spending shocks on consumption cannot be easily reconciled with existing optimizing business cycle models.  We extend the standard New Keynesian model to allow for the presence of rule-of-thumb (non-Ricardian) consumers.  We show how the interaction of the latter with sticky prices and deficit financing can account for the existing evidence on the effects of government spending"--Federal Reserve Board web site.
Notes: Also available in print.
Includes bibliographical references.
Title from PDF file as viewed on 8/2/2004.
System requirements: Adobe Acrobat Reader.
Mode of access: World Wide Web.