EFFECT OF FISCAL POLICY ON PRIVATE CONSUMPTION:SMOOTH TRANSITION REGRESSION MODEL
EFFECT OF FISCAL POLICY ON PRIVATE CONSUMPTION: SMOOTH TRANSITION REGRESSION MODEL

Summary/Abstract: This paper examines the impact of fiscal policy on private consumption. The results of our estimations shows that the size and sign of fiscal multipliers, of public consumption and tax revenues depend on fiscal policy changes. They indicate that households tend to behave in non-keynesian manner during fiscal expansions or contractions. Our results suggest that private consumption function react in a non-linear fashion to fiscal policy changes.

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