Nonlinear effects of government debt on private consumption: Evidence from OECD countries |
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| Authors: | Dooyeon Cho Dong-Eun Rhee |
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| Affiliation: | 1. Department of Economics, Kookmin University, Seoul 136-702, Republic of Korea;2. Department of International Economy, Korea Institute for International Economic Policy (KIEP), Seoul 137-747, Republic of Korea |
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| Abstract: | This paper investigates nonlinear effects of government debt on private consumption. The estimated consumption function shows smooth regime switching depending on the debt-to-GDP ratio, and a higher level of government debt crowds out private consumption to a greater extent. |
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| Keywords: | C23 E21 E62 H63 |
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