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:: Volume 2, Issue 8 (9-2012) ::
2012, 2(8): 57-86 Back to browse issues page
Modeling the Relationship between Government Expenditures and Private Consumption Regarding the Compensatory Effects of Government Expenditures in Iran (1959-2007)
Ali Hussein Samadi , Sayed Mohamad Sayedi
Abstract:   (7820 Views)

  D’Alessandro’s (2010) model investigates the impact of total government spending on private consumption but according to Barro’s (1981) suggestion, the impact of two groups of government spending on private consumption can be studied separately. The fist group produces utility affecting services for household and the second group is as an input in the private production process. So in the present article, we use d’Alessandro’s (2010) framework -after some changes in household utility function and the production function- for estimating the separate effects of two groups of government spending on private consumption.

  In the next step, the data for Iran (1959-2007) is considered and the estimation results show that the first group of government spending for household consumption in short run is Edgeworth complement and in long run is Edgeworth independent. While government spending in case of the second group has a positive relationship with household consumption both in long run and short run. Thus, this paper proposes particular attention to changes in the composition of government spending in favor of government consumption spending as an input (second group) rather than expenses affecting the utility of households.

 

Keywords: Private Consumption, Government Spending, Edge worth Substitution/Complementary, ARDL, Lumsdain-Papell, Iran.
     
Type of Study: توسعه ای | Subject: بخش عمومی
Received: 2011/09/19 | Accepted: 2012/10/16 | Published: 2012/09/15
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Samadi A H, Sayedi S M. Modeling the Relationship between Government Expenditures and Private Consumption Regarding the Compensatory Effects of Government Expenditures in Iran (1959-2007). Journal title 2012; 2 (8) :57-86
URL: http://jfm.khu.ac.ir/article-1-277-en.html


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Volume 2, Issue 8 (9-2012) Back to browse issues page
فصلنامه تحقیقات مدلسازی اقتصادی Journal of Economic Modeling Research
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