Please use this identifier to cite or link to this item: https://hdl.handle.net/10419/259925 
Authors: 
Year of Publication: 
2005
Series/Report no.: 
Working Paper No. 2006:2
Publisher: 
Lund University, School of Economics and Management, Department of Economics, Lund
Abstract: 
This paper analyses the relation between private and government consumption in 23 OECD countries between 1970 and 2001. In particular it addresses the issue of whether government consumption is a substitute for or a complement to private consumption. The empirical analysis is made with panel cointegration analysis, using the newly developed CUSUM cointegration test by \cite{westerlund05}. The method is extended by using a bootstrap technique to control for cross-sectional dependence. The results show that government consumption is a complement to private consumption for most of the countries and a substitute for only a few of the countries.
Subjects: 
Private consumption
Government consumption
Panel cointegration
JEL: 
C33
E21
E62
Document Type: 
Working Paper

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