Why does private consumption rise after a government spending shock?
本文用美国数据估计了一个包含私人消费与公共支出互补性的真实商业周期模型，发现两者存在强互补性，从而解释了政府支出冲击后私人消费上升的现象。
Abstract. Some recent empirical evidence suggests that private consumption is crowded‐in by government spending. This outcome violates neoclassical macroeconomic theory, according to which the negative wealth effect brought about by a rise in public expenditure should decrease consumption. In this paper, we develop a simple real business cycle model where preferences depend on private and public spending, and households are habit forming. The model is estimated by the maximum‐likelihood method using U.S. data. Estimation results indicate a strong Edgeworth complementarity between private and public spending. This feature enables the model to generate a positive response of consumption following a government spending shock. In addition, the impulse‐response functions generated by the estimated model are generally consistent with those obtained from a benchmark vector autoregression.