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model. We find that i) government spending increases output and induces a simultaneous decline of investment and the current … account, but does not affect consumption; ii) the responses of output and investment are smaller in more open economies, while … simultaneous decline in investment and the current account. …
Persistent link: https://www.econbiz.de/10008684676
The paper evaluates some proposals for macroeconomic stabilization in an open economy, which take the form of simple rules. The first rule assigns monetary policy to inflation control and does not require fiscal intervention. The second rule adds fiscal control of a foreign wealth target to the...
Persistent link: https://www.econbiz.de/10005067614
Do plans for a monetary union in Europe call for limits on the freedom of the member countries to use fiscal policy? To provide a tentative answer, we simulate the IMF model MULTIMOD, given various shocks, in the case of a European Monetary Union consisting only of France and Germany. The...
Persistent link: https://www.econbiz.de/10005791854
This paper evaluates the effects of fiscal policy on investment using a panel of OECD countries. In particular, we … investigate how different types of fiscal policy affect profits and, as a result, investment. We find a sizeable negative effect … of public spending - and in particular of its public wage component - on business investment. This result is consistent …
Persistent link: https://www.econbiz.de/10005791207
of growth. We employ historical data, recent cross-section data, and newly constructed public investment series. Our main … influenced by the scale of the economy, measured by its population; and third, investment in transport and communication is …
Persistent link: https://www.econbiz.de/10005791535
Business cycles reflect changes over time in the amount of trade between individuals. In this paper we show that incorporating explicitly intra-temporal gains from trade between individuals into a macroeconomic model can provide new insight into the potential mechanisms driving economic...
Persistent link: https://www.econbiz.de/10009221567
This paper uses a two-country overlapping generations model to study the international transmission of fiscal policy among open interdependent economies under free international capital mobility. With only lump-sum taxes and transfers, international transmission involves only pecuniary...
Persistent link: https://www.econbiz.de/10005504214
This paper considers the effects of monetary and fiscal policies in an optimizing model with capital accumulation and finite lives. An increase in monetary growth is no longer superneutral in a money-capital economy, but leads to a reduction in the real interest rate and increases in the capital...
Persistent link: https://www.econbiz.de/10005504290
This paper analyses the changes to the tax and social security systems that have occurred since Czechoslovakia's `velvet revolution' in 1989. It shows how the tax system is moving to meet the requirements of a market economy. It suggests that a particularly high priority has to be given to...
Persistent link: https://www.econbiz.de/10005504525
The paper investigates four challenges to exchange rate stability in the coming years and explores their implications for macroeconomic and exchange rate policy. The first section explores the importance of seigniorage in financing the government budget in Southern European countries. The second...
Persistent link: https://www.econbiz.de/10005504541