Government Spending and Individual’s Expectations. Evidence from Micro Data
25 May 2023 @ 3:30 pm - 5:30 pm
15:30 pm, Friday, 25 May 2023
Fiscal policy has a significant impact on economic decisions, both at the individual and firm levels. Particularly, changes in taxation and government spending affect consumer spending, investment, job creation, and profitability. However, the impact of fiscal policy is still highly debatable, both from theoretical and empirical perspectives. In this paper, we focus on individuals’ financial expectations and examine directly the impact of government spending changes on individual economic behaviour. We explore whether households form optimistic or pessimistic financial beliefs following changes in fiscal policy via welfare payments. We find evidence of the households’ confidence in the transmission mechanism of fiscal policy on the real economy.
About the speaker
Dr. Gramozi is a Lecturer in Economics (AEP) at the Department of Political Economy of King’s College London. She is also a member of the Quantitative Political Economy Group at King’s College. Prior to moving to King’s, she was a researcher and teaching associate at the Queen Mary University of London, the University of Cyprus, the University of Ioannina and the Agricultural University of Athens. She holds a PhD (2020) in Economics from the University of Cyprus. More info can be found at www.kcl.ac.uk