Increases in government consumption have a Keynesian effect on real per capita private consumption, say António Afonso, José Alves and João Tovar Jalles. Using a sample of 174 countries between 1970 and 2018, they assess the impact of austerity and the implications for budgetary and policy decisions in the light of Covid-19 fiscal adjustments.
Published: ifo Institute for Economic Research at the University of Munich,
Editor: Juliet Shaw.
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