New Open Economy Policy Perspectives: Modified Golden Rule and Hybrid Welfare

This paper raises several new issues in the context of a modified growth model and the golden rule, respectively. Key issues solved here include the role of long-run monetary policy – to some extent also fiscal policy – where the golden rule is considered as a serious point of reference for economic policymakers; this includes aspects of the Transatlantic Banking crisis. Also the role of negative external effects from C02 production is considered here in a straightforward manner. Finally, a new approach for a consistent transition between the Keynesian approach and the long-run neoclassical world is proposed.