Based on the German Socio-economic Panel (SOEP), we show that household consumption drops and saving rises … significantly within four years after a child moves out of a household. Per capita consumption of parents is approximately leveled … calibrated life-cycle models assuming a smoothing of per capita consumption for parents with children in the household …

Using VAR analysis on US data, we show that unanticipated fiscal expansions boost private consumption and business … crowding-in of both consumption and entry can be generated only under very specific assumptions. In a static model with full … such that future profits are high enough to generate entry. However, consumption falls for conventional parameter values …