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This paper aims to examine the effect of housing wealth on household consumption when there are resale and refinancing constraints that prevent housing assets from being cashed out.

Based on Household Expenditure Survey data in Hong Kong from 1999 to 2010, regression analysis is applied to compare the housing wealth effects of private and subsidized homeowners. Propensity score matching is adopted to ensure that the two groups of homeowners share similar household income. Further regression analysis is conducted to examine private homeowners’ consumption when their recourse mortgages are in negative equity.

Subsidized homeowners, who are not allowed to resell their units before sharing their capital gain with the government, experienced an insignificant housing wealth effect. While private homeowners experienced a significant housing wealth effect, the effect was weakened in the presence of a resale constraint induced by negative equity. The results remain robust after the application of more rigorous sample selection through propensity score matching.

The analyses are subject to two potential data limitations. One is a relatively small sample size. The other is that data on financial assets and mortgages are unavailable and have to be indirectly controlled through household characteristics. Nevertheless, our estimated marginal propensity to consume out of housing wealth is 0.03 of the annual household consumption for private homeowners, which is within the range of estimates reported in previous literature.

This study shows that the housing wealth effect enjoyed in the private sector does not necessarily apply to the subsidized sector where resale and refinancing constraints exist. This is not to suggest that the constraints be removed. Rather, policymakers should be aware of the tradeoff: while the constraints ensure that government subsidies are used to assist home ownership, not capital gain, they also bring about consumption inequality in a society, especially in a booming housing market.

Our findings extend the literature on the housing wealth effect, which has been exclusively focusing on private homeowners, to subsidized homeowners. This study also adds to the literature on housing welfare by highlighting that the resale constraints of subsidized housing can weaken the housing wealth effect.

This study examines the differences in the economic stimulus effects, transmission mechanisms, and output multipliers of government consumption, government traditional investment, and government science and technology investment.

This study constructs and estimates a New Keynesian model of endogenous technological progress embedded in the research and development (R&D) and technology transfer sectors. Using Chinese macroeconomic time series data from 1996 to 2019, this study calibrates and estimates the model and analyzes the impulse response function and a counterfactual simulation of expenditure structure adjustment.

The results show that compared with the traditional dynamic stochastic general equilibrium (DSGE) model, the endogenous process of technological progress amplifies the impact of government consumption shock and traditional government investment shock on the macroeconomy, leading to greater economic cycle fluctuations. As government investment in science and technology has positive external spillover effects on firm R&D activities and the application of innovation achievements, it can promote more sustainable economic growth than government consumption and traditional investment in the long run.

This study constructs an extended New Keynesian model with different types of government spending, which includes endogenous technological progress within the R&D and technology transfer sectors, thereby linking fiscal policy, business cycle fluctuations and long-term economic growth. This model can study the macroeconomic impact of fiscal expenditure structure adjustment when fiscal expansion is limited. In the Bayesian estimation of model parameters, this study not only uses macroeconomic variables but also adds a sequence of private R&D investment.

The degree of development and the way to identify a fiscal shock matter in evaluating the effects of the fiscal policy. This paper contributes to the debate on the effects of a fiscal expansion on private consumption and the real effective exchange rate.

This paper uses a sign-restriction method to identify a fiscal shock in the panel structural VAR analysis in the context of both developed and developing countries.

The authors’ find that (1) private consumption increases in response to a positive government spending shock in both groups, yet such consumption effect is greater in developing than industrial countries; (2) the response of real effective exchange rate to the government spending shock varies across groups: it depreciates in developed countries and appreciates in developing countries; (3) trade balance improves in both groups.

This study sheds light on the differential effects of fiscal shock on consumption and real exchange rate in both developed and developing economies.

The purpose of this paper is to investigate the effect of macroeconomic factors in income growth, as defined by IS‐LM, and the relation between these factors and economic cycles. More precisely, the paper aims to investigate how the demand and supply factors affect income growth, while the relation between these factors and economic cycles is also examined.

The sample under examination is the annual US data for 1928‐2007, using the official data as released in the US Bureau of Economic Analysis, while for the crises the used data have been provided by the National Bureau of Economic Research, Graduate Center of the City University of New York. The Business Cycles were examined, using the methodology developed by the National Bureau of Economic Research, Graduate Center of the City University of New York.

The research findings imply that government consumption expenditure growth is the most important factor that affects Gross Domestic Product growth positively. A change of 10 percent in Government consumption leads to 1.65 percent Gross Domestic Product growth. Also, the duration of crises is affected by lowering interest rates, while being also affected by government and personal consumption. Overall, the empirical findings of the study indicate that the role of private investments for Gross Domestic Product growth may be overrated among policy makers, given the low contribution of this factor to Gross Domestic Product growth.

The model used has some limitations. First, it does not examine the effect of a policy over Gross Domestic Product growth in longer time‐spans. Second, it does not investigate factor inter‐reactions. It could also be argued that other factors that would stimulate growth or affect crisis are not accounted for, such as wars, tax policies, international trade and population growth. Finally, the model investigates only the US economy; therefore, it could be argued that the findings may not coincide with findings from other economies.

The paper contributes to the economics literature by adding a further insight into the possible mix of policy that could be followed by regulatory authorities and governments for both the boost of economy and the finalization of economic crises.

We make use of rich microdata from the Belgian MEqIn survey, which contains detailed information on individual consumption, public consumption inside households, and time use. We explain the observed household behavior by means of a collective model that integrates marriage market restrictions on intrahousehold allocation patterns. We adopt a revealed preference approach that abstains from any functional form assumptions on individual utility functions or intrahousehold decision processes. This allows us to (set) identify the sharing rule, which governs the intrahousehold sharing of time and money, and to quantify economies of scale within households. We use these results to conduct a robust individual welfare and inequality analysis, hereby highlighting the important role of detailed consumption and time use data.

The purpose of this paper is to study the short‐term macroeconomic effects of the fiscal policy in Colombia for the 1980‐2007 period using a structural vector autoregression (SVAR) model.

The authors' benchmark is a five‐variable SVAR model which includes government spending, output, tax revenues, inflation and short‐term interest rates. In addition, the authors specified six‐variable VAR models, adding in turn private consumption, private investment, the unemployment rate and the real minimum wage to the last set of variables. Two alternative identification techniques are used in the VARs to check the robustness of the results.

The following effects of a positive government spending shock are found. First, the GDP responds positively and significantly during the first six quarters. The cumulative output multiplier fluctuates between 1.12 and 1.19. Second, both inflation and nominal interest rates respond positively and significantly. Third, the authors find a significant positive response by both private consumption and private investment. Finally, the unemployment rate reacts negatively and significantly.

The most surprising result comes from the response of output to a positive shock in taxes. Nonetheless, the positive respond of the GDP is short lived and has little significance.

The authors' results support the smoothing role of fiscal policy on output fluctuations, which implies its capacity to restore real activity effectively in critical times like the ones currently being forecast.

The negligible results found previously for Colombia could be related to the fiscal data used, which are not keep coherence with national accounting. To solve these obstacles, a quarterly fiscal database is assembled on an approximately accrual basis for the general government.

Despite being a flexible tool that can address several macroeconomic issues, Dynamic Stochastic General Equilibrium (DSGE) models have been rarely used to analyse the interaction between monetary and fiscal policy until the post-financial crisis, leaving a gap in the analysis of how government consumption affects the transmission mechanism of monetary policy. This motivates this paper to analyse how government consumption affects the dynamics of a small open economy, once the former is included in a non-separable form to the utility function. To the best of the authors' knowledge, this issue has not been addressed by the literature, and the authors aim to do so in this paper.

A standard New Keynesian model for a small open economy is used to allow for the presence of non-separable government consumption in the utility function. The model is supported by panel regressions.

The inclusion of Government consumption dampens the transmission mechanism of monetary policy. The degree of openness dampens the crowding out effect of fiscal policy to monetary policy, as the exchange rate channel empowers it. Empirical estimates for 35 OECD countries support the theoretical findings of the model.

The effect of government consumption on the transmission mechanism of MP has not been addressed in the literature. This paper contributes to the literature by addressing this issue.

• • The inclusion of Government consumption dampens the transmission mechanism of monetary policy.

• • The degree of openness alleviates the crowding out effect of fiscal policy to monetary policy, as the exchange rate channel empowers it.

• • Empirical estimates for 35 OECD countries support the theoretical findings of the model.

• The inclusion of Government consumption dampens the transmission mechanism of monetary policy.

• The degree of openness alleviates the crowding out effect of fiscal policy to monetary policy, as the exchange rate channel empowers it.

• Empirical estimates for 35 OECD countries support the theoretical findings of the model.

The purpose of this paper is to study the role of public and private imbalances in the cyclicality of the current account balance in a sample of advanced and developing countries. Within developing countries, the evidence does not establish the dependency of private investment on private savings and private consumption is the main driver of the saving/investment balance. In contrast, private savings seem to be better mobilized to finance private investment and the latter is the main driver of the saving/investment balance in advanced countries. Deterioration in the current account balance in response to higher private consumption could be detrimental to growth and external stability. In contrast, an investment strategy that promotes growth is likely to attract financial flows and reduce the risk of a widening current account deficit on external stability.

The paper studies determinants of the current account deficit. It studies current account fluctuations in the short‐run and explains these fluctuations by analyzing movements in the underlying components: public and private savings as well as investments and resulting imbalances. Of particular interest is the interaction between the government budget deficit, the private saving/investment balance, and the current account balance.

Using time‐series estimates, co‐movements indicate that fluctuations in the current account balance in many advanced countries appear to be driven by private investment that determines cyclicality in imports. In contrast, cyclicality in the current account appears to be driven by private consumption that determines fluctuations in imports in many developing countries. In general, fluctuations in the government budget deficit are mostly driven by government investment and fluctuations in the private saving/investment balance are mostly driven by fluctuations in private investment. Further, fluctuations in the current account balance appear to be mostly driven by fluctuations in the private saving/investment balance.

The paper explains the dynamics of the current account in relation to developments in public and private imbalances and its underlying components. It shows the effects of changes in the budget deficit and its underlying components on cyclicality in the current account. Similarly, cyclicality in the current account balance with cyclical movements in private savings and investment is studied, along with which factors affect the components of the current account balance. In particular, the paper establishes which components of the current account significantly respond to the cyclical changes in macroeconomic variables.

European Union (EU) member states are dedicated to a set of sustainable development goals, among them to: (1) promote well-being for all at all the ages and (2) achieve gender equality. This chapter uses the National Transfer Accounts (NTA) methodology that enables comprehensive measurement of intergenerational transfers, both public and private, and differences in the gender equality promotion among the countries. Our analysis is based on the fully comparable NTA results for 25 EU countries from 2010. The authors perform cluster analysis based on five indicators, measuring the importance of different types of age reallocations and the differences in gender equality promotion among the EU countries. Since the economic life cycle (showing the level of dependency) and its financing strongly depend on country-specific institutional and cultural settings, the authors link their results with the typical welfare regimes’ typology. The authors end up with three different groups of countries showing a clear north–south division of countries.

The purpose of this paper is to examine the inter-relationships between product category embarrassment, consumption contexts, individual’s attachment styles, and their combined effects on individual’s preference toward online and physical store channels while buying embarrassing products.

Experimental design was employed by taking a sample of young adult students.

The results of this study shows that embarrassing product class and social consumption context can potentially elicit embarrassment. Anxiously attached individuals are more prone to be embarrassed compared to the individuals adopting secure and avoidant attachment styles.

Value of the paper lies in empirically investigating the complex inter-relationships between product class-specific embarrassment, context specific embarrassment, individual’s attachment styles and buying channel selection.