Template-type: ReDif-Paper 1.0
Author-Name: Kühn Stefan 
Author-Name: Muysken Joan 
Author-Name: Veen Tom van
Author-workplace-name: METEOR
Title: Government Spending in a New Keynesian Endogenous Growth Model
Abstract: Standard New Keynesian models cannot generate the widely observed result that private consumption is crowded in by government spending. We use a New Keynesian endogenous growth model with endogenous labour supply to analyse this phenomenon. The presence of small direct productivity effects of government spending as well as Calvo pricing and a Taylor monetary policy rule significantly enhance the growth rate effect of temporary government spending. The resulting model can explain the consumption crowding-in phenomenon for realistic parameter values. We also find plausible values for the government spending multiplier.
Keywords: public economics ; 
Series: Research Memoranda
Creation-Date: 2010
Number: 001
File-URL: http://digitalarchive.maastrichtuniversity.nl/fedora/objects/guid:b648a373-331f-4c1e-a71e-b1991c25b34d/datastreams/ASSET1/content
File-Format: application/pdf
File-Size: 641714
Handle: RePEc:unm:umamet:2010001