The study looked at how government spending and taxes affect private consumption and investment in 174 countries from 1970 to 2018. They found that when the government spends more, private consumption goes up. Tax increases can also lead to higher private consumption during fiscal consolidations. Additionally, private investment increases when the government cuts spending. This effect is more pronounced in highly indebted advanced economies after tax hikes. Taxation has a bigger negative impact on private consumption during financial crises, especially when the economy is not consolidating.