Essays in Macroeconomics

This paper analyzes the effects of government spending on heterogeneous consumers. Using household level data for the U.S. from the Consumer Expenditure Survey, I document that age is a key driver of consumption adjustment to government spending shocks, above wealth or income level. I propose a new transmission channel of fiscal policy that generates asymmetric effects across age groups. I develop a New Keynesian life-cycle model where young agents accumulate skills on-the-job through a learning-by-doing mechanism. As individuals work more following a fiscal stimulus, the young raise the productivity of the firm. In presence of wage rigidities, this puts downward pressure on future marginal costs and leads to a higher increase in labor demand for young workers. The ensuing decline in real interest rates and boost in young real wages generate both intertemporal and redistributional effects that benefit young individuals, who increase their consumption. Using both micro- and macro-level data, I further document that a government spending shock leads to a significant rise in productivity that is driven by young individuals.

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Location:

Online via Zoom -

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Affiliation:

Department of Economics

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Type:

Thesis defence

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Co-Supervisor:

Prof. Axelle Ferrière (Paris School of Economics)

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Defendant:

Laure Simon (EUI - Economics)

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Examiner:

Prof. Morten O. Ravn (University College London)

Prof. Jean Imbs (NYU Abu Dhabi and Paris School of Economics)

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Supervisor:

Prof. Evi Pappa (EUI and Universidad Carlos III Madrid)

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Contact:

Lucia Vigna (EUI - Department of Economics) - Send a mail