Advertising and Aggregate Consumption: A Bayesian DSGE Assessment
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http://hdl.handle.net/10045/79511
Title: | Advertising and Aggregate Consumption: A Bayesian DSGE Assessment |
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Authors: | Molinari, Benedetto | Turino, Francesco |
Research Group/s: | Análisis Económico |
Center, Department or Service: | Universidad de Alicante. Departamento de Fundamentos del Análisis Económico |
Keywords: | Advertising | Aggregate consumption | Bayesian | DSGE model |
Knowledge Area: | Fundamentos del Análisis Económico |
Issue Date: | Aug-2018 |
Publisher: | John Wiley & Sons |
Citation: | The Economic Journal. 2018, 128(613): 2106-2130. doi:10.1111/ecoj.12514 |
Abstract: | Aggregate data reveal that in the US, advertising absorbs 2% of GDP. Because the purpose of brand advertising is to foster sales, we ask whether such spending appreciably affects aggregate consumption and economic activity. This question is addressed by developing and estimating a dynamic general equilibrium model in which households’ preferences for differentiated goods depend on brand advertising. Estimated results for the US economy indicate that in the long‐run, the presence of advertising raises aggregate consumption, investment, and hours worked, eventually fostering overall economic activity. We also find that advertising has a relevant impact on fluctuations in consumption and investment. |
Sponsor: | Molinari acknowledges financial support from the Spanish Ministry of Science and Technology (Grants SEJ1512 and ECO2013‐43526‐R). Turino acknowledges financial support from MINECO/FEDER (ECO2015‐70540‐P). |
URI: | http://hdl.handle.net/10045/79511 |
ISSN: | 0013-0133 (Print) | 1468-0297 (Online) |
DOI: | 10.1111/ecoj.12514 |
Language: | eng |
Type: | info:eu-repo/semantics/article |
Rights: | © 2017 Royal Economic Society. Published by John Wiley & Sons |
Peer Review: | si |
Publisher version: | https://doi.org/10.1111/ecoj.12514 |
Appears in Collections: | INV - Análisis Económico - Artículos de Revistas |
Files in This Item:
File | Description | Size | Format | |
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2018_Molinari_Turino_EconJ_final.pdf | Versión final (acceso restringido) | 414,02 kB | Adobe PDF | Open Request a copy |
2018_Molinari_Turino_EconJ_accepted.pdf | Accepted Manuscript (acceso abierto) | 530,32 kB | Adobe PDF | Open Preview |
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