Kumhof, Michael; Laxton, Douglas - In: Journal of International Economics 91 (2013) 1, pp. 113-127
This paper analyzes the scope for rules-based countercyclical fiscal policy in small open economies where a subset of …. But they minimize fiscal instrument volatility rather than business cycle volatility. More aggressively countercyclical … fiscal instrument volatility. If liquidity-constrained households' labor income is independent of raw materials prices, the …