A panel cointegration approach to estimating substitution elasticities in consumption

Monica Auteri and Mauro Costantini

Economic Modelling, 2010, vol. 27, issue 3, 782-787

Abstract: This paper investigates the relationship between government spending and private consumption. The general framework is a cointegration approach of Ogaki (1992) used to estimate the intratemporal elasticity of substitution between government and private consumption in a panel of 15 European countries. Recently developed non-stationary panel methodologies that assume cross-section dependence are applied. Results indicate an Edgeworth substitutability between private and public spending.

Keywords: Cointegration; Government; expenditure; Intratemporal; substitution; Macroeconomic; aspects; of; public; finance; Panel; Unit; root (search for similar items in EconPapers)
Date: 2010
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Citations: View citations in EconPapers (19)

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