Heterogeneous Consumers and Fiscal Policy Shocks

Emily Anderson, Atsushi Inoue and Barbara Rossi

No 822, Working Papers from Barcelona School of Economics

Abstract: This paper studies empirical facts regarding the effects of unexpected changes in aggregate macroeconomic fiscal policies on consumers that are allowed to di€er depending on their individual characteristics. We use data from the Consumption Expenditure Survey (CEX) to estimate individual-level impulse responses as well as multipliers for government spending. The main empirical finding of this paper is that unexpected fiscal shocks have substantially different effects on consumers depending on their income and age levels. In particular, the wealthiest individuals tend to behave according to the predictions of standard RBC models, whereas the poorest individuals tend to behave according to standard IS-LM (non-Ricardian) models, most likely due to credit constraints. Furthermore, government spending policy shocks tend to decrease consumption inequality. Forthcoming in Journal of Money, Credit and Banking

JEL-codes: D1 E21 E4 E52 H31 I3 (search for similar items in EconPapers)
Date: 2015-09
New Economics Papers: this item is included in nep-mac and nep-pbe
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Citations: View citations in EconPapers (2)

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Related works:
Journal Article: Heterogeneous Consumers and Fiscal Policy Shocks (2016)
Working Paper: Heterogeneous consumers and fiscal policy shocks (2015)
Working Paper: Heterogeneous Consumers and Fiscal Policy Shocks (2013)
Working Paper: Heterogeneous Consumers and Fiscal Policy Shocks (2012)
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Persistent link: https://EconPapers.repec.org/RePEc:bge:wpaper:822

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