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.
|Number of pages||4|
|Publication status||Published - 2013 Dec|
- Government debt
- Panel smooth transition regression error correction model
ASJC Scopus subject areas
- Economics and Econometrics