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Reasons for the U.S. growth period in the nineties: non-keynesian effects, asset wealth and productivity

Burger, Anton (2006) Reasons for the U.S. growth period in the nineties: non-keynesian effects, asset wealth and productivity. Department of Economics Working Paper Series, 95. Inst. für Volkswirtschaftstheorie und -politik, WU Vienna University of Economics and Business, Vienna.

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Abstract

This paper investigates several possible reasons for the exceptional period of growth in the nineties in the US.. These years can be characterised as a case of an expansionary fiscal consolidation as strong growth and structural surpluses were observed. Five different channels, the literature suggests for relationships between government spending and consumption are investigated. There are hints that the economy did not work in a Keynesian way but there is no proof of the existence of a Non-Keynesian effect. Expectational effects could not be separated empirically from asset wealth. Whereas standard consumption estimations failed, a model adding a factor containing asset wealth and expectations was finally able to explain consumption from 1996 onwards. This has important implications for policy. Moreover, compositional effects were found to be important. The two main findings of the paper, namely an asset wealth/expectations effect and compositional effects support the interpretation of a positive link between public savings, asset values and growth. (author's abstract)

Item Type: Paper
Keywords: fiscal policy / non-keynesian effects / budget consolidation / consumption / asset wealth
Classification Codes: RVK QG 620 ; JEL H30, H31, E60, E62
Divisions: Departments > Volkswirtschaft
Depositing User: Repository Administrator
Date Deposited: 24 Jul 2006 15:46
Last Modified: 05 Jun 2015 03:59
URI: http://epub.wu.ac.at/id/eprint/1360

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