Reasons for the U.S. growth period in the nineties: non-keynesian effects, asset wealth and productivity

Anton Burger

Publication: Working/Discussion PaperWU Working Paper


This paper investigates several possible reasons for the exceptional period of growth in the nineties in the US.. These years can be characterised as a case of an expansionary fiscal consolidation as strong growth and structural surpluses were observed. Five different channels, the literature suggests for relationships between government spending and consumption are investigated. There are hints that the economy did not work in a Keynesian way but there is no proof of the existence of a Non-Keynesian effect. Expectational effects could not be separated empirically from asset wealth. Whereas standard consumption estimations failed, a model adding a factor containing asset wealth and expectations was finally able to explain consumption from 1996 onwards. This has important implications for policy. Moreover, compositional effects were found to be important. The two main findings of the paper, namely an asset wealth/expectations effect and compositional effects support the interpretation of a positive link between public savings, asset values and growth. (author's abstract)
Original languageEnglish
Place of PublicationVienna
PublisherInst. für Volkswirtschaftstheorie und -politik, WU Vienna University of Economics and Business
Publication statusPublished - 2006

Publication series

NameDepartment of Economics Working Paper Series

WU Working Paper Series

  • Department of Economics Working Paper Series

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