Nonlinear effects of government debt on private consumption: Evidence from OECD countries
Dooyeon Cho and
Economics Letters, 2013, vol. 121, issue 3, 504-507
This paper investigates nonlinear effects of government debt on private consumption. The estimated consumption function shows smooth regime switching depending on the debt-to-GDP ratio, and a higher level of government debt crowds out private consumption to a greater extent.
Keywords: Consumption; Government debt; Nonlinearity; Panel smooth transition regression error correction model (search for similar items in EconPapers)
JEL-codes: C23 E21 E62 H63 (search for similar items in EconPapers)
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Persistent link: https://EconPapers.repec.org/RePEc:eee:ecolet:v:121:y:2013:i:3:p:504-507
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