Electronic Resource
Oxford, UK
:
Blackwell Publishing Ltd
Review of income and wealth
23 (1977), S. 0
ISSN:
1475-4991
Source:
Blackwell Publishing Journal Backfiles 1879-2005
Topics:
Economics
Notes:
The multiplier effects resulting from an isolated increase in the level of public consumption within different public branches are investigated and the policy implications are discussed. The article begins with a theorethical analysis which shows why and in which ways these multipliers can be expected to differ between public branches. Thereafter, an empirical investigation is given, based on simulations with an econometric model of the Swedish economy. In this model the public activities are divided into 13 different public branches. The effects of an increase in public consumption on employment, imports and private consumption are found to differ considerably depending on which branch of the public sector is expanded. Some implications for short run stabilization policy are discussed. The article ends with a special analysis of the implications for a medium term planning problem: the trade off between private and public consumption growth. This analysis throws new light on the old topic “private or public consumption”. In an economy with highly differentiated production in the public sector the trade-off is shown not to be unique. The sacrifice of private consumption growth corresponding to a given growth of public consumption expenditures will vary considerably according to the distribution of the public consumption growth within the different branches of the public sector.
Type of Medium:
Electronic Resource
URL:
http://dx.doi.org/10.1111/j.1475-4991.1977.tb00024.x
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