, it is shown that government expenditures can cause a rise in private consumption, real wages, and employment if the … to decline. Households are willing to raise consumption if monetary policy is active, i.e. ensures that the real interest … rate rises with inflation. Otherwise, private consumption can also be crowded-out, as in the conventional case where …

, it is shown that government expenditures can cause a rise in private consumption, real wages, and employment if the … to decline. Households are willing to raise consumption if monetary policy is active, i.e. ensures that the real interest … rate rises with inflation. Otherwise, private consumption can also be crowded-out, as in the conventional case where …

preference discount rate ρ perindividual. This can be done because the consumption of a large prize is smoothed over a largertime …

consumption models, including a numerically solved precautionary savings model. We find that inter-country differences are …