Year: 1987
Author: Flaig, Gebhard
Journal of Contextual Economics – Schmollers Jahrbuch, Vol. 107 (1987), Iss. 3 : pp. 337–359
Abstract
This paper deals with the question: Depends private consumption on the choice of tax- versus debt-financing of government expenditure? Theoretical basis is a lifecycle model with rational expectations. In this model only unexpected events cause a change of consumption (surprise consumption function). The empirical results show that - given net labour income - an unanticipated government deficit reduce private consumption expenditure. The hypothesis of fiscal illusion can be rejected, but the problem of one-to-one equivalence of tax- and debt-financing can not definitely be settled.
Journal Article Details
Publisher Name: Global Science Press
Language: Multiple languages
DOI: https://doi.org/10.3790/schm.107.3.337
Journal of Contextual Economics – Schmollers Jahrbuch, Vol. 107 (1987), Iss. 3 : pp. 337–359
Published online: 1987-03
AMS Subject Headings: Duncker & Humblot
Copyright: COPYRIGHT: © Global Science Press
Pages: 23