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We used dynamic panel models and the Generalised Method of Moments (GMM) approach for 24 and 32 advanced and emerging countries from 1995 to 2020. Our findings show that fiscal impulses increase private consumption. However, when households are highly indebted, the effects are different, and the increase in public spending or the reduced taxes discourages household consumption compared to the baseline (lower debt) group. These results suggest a precautionary effect.<\/jats:p>","DOI":"10.1007\/s42495-024-00141-3","type":"journal-article","created":{"date-parts":[[2024,10,14]],"date-time":"2024-10-14T00:01:53Z","timestamp":1728864113000},"page":"31-57","update-policy":"https:\/\/doi.org\/10.1007\/springer_crossmark_policy","source":"Crossref","is-referenced-by-count":1,"title":["Consumption patterns of indebted households: unravelling the relevance of fiscal policy"],"prefix":"10.1007","volume":"19","author":[{"ORCID":"https:\/\/orcid.org\/0000-0002-6926-2653","authenticated-orcid":false,"given":"Ant\u00f3nio","family":"Afonso","sequence":"first","affiliation":[]},{"given":"Eduardo","family":"de S\u00e1 Fortes Leit\u00e3o Rodrigues","sequence":"additional","affiliation":[]}],"member":"297","published-online":{"date-parts":[[2024,10,14]]},"reference":[{"issue":"51","key":"141_CR1","doi-asserted-by":"publisher","first-page":"5577","DOI":"10.1080\/00036846.2019.1616068","volume":"51","author":"A Afonso","year":"2019","unstructured":"Afonso, A., & Leal, F. 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