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Published in:
2017 | OriginalPaper | Chapter
5. Test Results: Consumer Spending and Borrowing Models (One-Variable Deficit)
Author : John J. Heim
Published in: Crowding Out Fiscal Stimulus
Publisher: Springer International Publishing
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Abstract
This chapter undertakes 95 tests of different models to determine if the government deficit has a significant, measurable crowd out effect on private consumption as well as a stimulus effect. The models included 21 OLS and 26 2SLS models, and 48 tests of the robustness of those results by testing to see if results could be replicated in three different, but overlapping time periods. Results overwhelmingly indicated crowd out adversely affected consumption spending. The single variable (Revenue Spending) definition of the deficit was used.