Business Cycles and Fiscal Policy in an Open Economy

Do business cycle fluctuations leave a role and a welfare case for an active stabilization policy by means of fiscal policy instruments? We address this issue in a two-sector open economy model with price-taking firms and imperfect competition in the labour market. Fiscal policies are shown to affect the equilibrium distribution of prices and hence output in the case of both supply (productivity) and demand (preferences) shocks.

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Year of publication:	1998
Authors:	Andersen, T.M. ; Holden, S.
Institutions:	Økonomisk institutt, Universitetet i Oslo
Subject:	BUSINESS CYCLES \| FISCAL POLICY \| DEMAND \| SUPPLY

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Extent:	application/pdf
Series:	Memorandum.
Type of publication:	Book / Working Paper
Notes:	The text is part of a series Memorandum Number 12/1998 31 pages
Classification:	E32 - Business Fluctuations; Cycles ; E63 - Comparative or Joint Analysis of Fiscal and Monetary Policy; Stabilization ; F41 - Open Economy Macroeconomics
Source:	RePEc - Research Papers in Economics

Persistent link: https://www.econbiz.de/10005652415