Understanding the Effects of Government Spending on Consumption
扩展新凯恩斯模型，引入经验法则消费者，解释政府支出增加为何会刺激消费，对研究财政政策效果的经济学者有参考价值。
Recent evidence suggests that consumption rises in response to an increase in government spending. That finding 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 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.