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In this paper, we revisit the effects of government spending shocks on private consumption within an estimated New-Keynesian DSGE model of the euro area featuring non-Ricardian households. Employing Bayesian inference methods, we show that the presence of non- Ricardian households is in general conducive to raising the level of consumption in response to government spending shocks when compared with the benchmark specification without non-Ricardian households. However, we find that there is only a fairly small chance that government spending shocks crowd in consumption, mainly because the estimated share of non-Ricardian households is relatively low, but also because of the large negative wealth effect induced by the highly persistent nature of government spending shocks.

Consumption (Economics) -- European Union countries -- Econometric models. --- Crowding out (Economics) -- European Union countries -- Econometric models. --- Electronic books. -- local. --- European Union countries -- Appropriations and expenditures -- Econometric models. --- Fiscal policy -- European Union countries -- Econometric models. --- Macroeconomics --- Public Finance --- National Government Expenditures and Related Policies: General --- Macroeconomics: Consumption --- Saving --- Wealth --- Labor Economics: General --- Fiscal Policy --- Personal Income, Wealth, and Their Distributions --- Public finance & taxation --- Labour --- income economics --- Expenditure --- Consumption --- Labor --- Fiscal policy --- Disposable income --- Expenditures, Public --- Economics --- Labor economics --- National income --- United States --- Consumption (Economics) --- Crowding out (Economics) --- Econometric models. --- European Union countries --- Appropriations and expenditures --- Income economics