The Multiplier-Effects of Non-Wasteful Government Expenditure

Marattin, Luigi ; Marzo, Massimiliano (2010) The Multiplier-Effects of Non-Wasteful Government Expenditure. Bologna: Dipartimento di Scienze economiche DSE, p. 32. DOI 10.6092/unibo/amsacta/4537. In: Quaderni - Working Paper DSE (704). ISSN 2282-6483.
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Abstract

Macroeconomic literature has traditionally regarded public expenditure as yielding no utility per se to any agent in the economy. In line with a few previous contributions (Linneman and Schabert 2004, Bouakez and Rebei 2007) we build a New Keynesian DSGE model with real and nominal rigidities and distortionary fiscal policy rules, calibrated on the Euro-area (1990:Q1-2008:Q4), where part of public spending is allowed to either Edgeworth complement or substitute private consumption by affecting its marginal utility. We show that the the interaction between the share of usefulness of public spending and the specification of fiscal and monetary policy rules is able to deliver private consumption multipliers which are in line with the empirical findings for the Euro-Area.

Abstract
Document type
Monograph (Working Paper)
Creators
CreatorsAffiliationORCID
Marattin, Luigi
Marzo, Massimiliano
Keywords
Fiscal Policy, Useful Government Expenditure, Fiscal Multipliers
Subjects
ISSN
2282-6483
DOI
Deposit date
04 Feb 2016 11:26
Last modified
04 Feb 2016 11:26
URI

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