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Wagner-Keynesian Nexus in a DSGE Model

Author

Listed:
  • Shiou-Yen Chu

    (Associate Professor, Department of Public Finance, National Chengchi University)

  • Brian Chi-ang Lin

    (Professor, Department of Public Finance, National Chengchi University)

Abstract

This research integrates two longstanding controversies, Wagner's law and Keynesian hypothesis, into a dynamic stochastic general equilibrium (DSGE) model. The former perceives that government spending endogenously varies with output growth, while the latter considers that government spending exogenously triggers economic growth. We show that these two standpoints will gradually coincide as private consumption and public expenditure become more substitutable.

Suggested Citation

  • Shiou-Yen Chu & Brian Chi-ang Lin, 2021. "Wagner-Keynesian Nexus in a DSGE Model," Economics Bulletin, AccessEcon, vol. 41(4), pages 2725-2735.
    • Handle: RePEc:ebl:ecbull:eb-21-00253
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    File URL: http://www.accessecon.com/Pubs/EB/2021/Volume41/EB-21-V41-I4-P235.pdf
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    More about this item

    Keywords

    Government spending; Wagner's law; Nominal rigidity;
    All these keywords.

    JEL classification:

    • E6 - Macroeconomics and Monetary Economics - - Macroeconomic Policy, Macroeconomic Aspects of Public Finance, and General Outlook
    • H3 - Public Economics - - Fiscal Policies and Behavior of Economic Agents

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