Households' Spending Habits Shift Based on Country's Fiscal Health
Short-run fiscal policy changes can have unexpected effects on consumption. When a country's fiscal situation is bad, households tend to react in a non-Keynesian way, meaning their spending doesn't follow the usual patterns. However, when the fiscal situation is good, Keynesian behavior is more common. This suggests that how people spend money in response to fiscal policy isn't always straightforward, even in transition economies.