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Appropriate fiscal policy over the business cycle: Proper stimulus policies can work
Graves, Philip E. - 2010
Fiscal policy has become quite controversial in the post-Keynesian era, the debate over the Obama stimulus package being a contentious recent example. Some pundits go so far as to take the position that macroeconomic theory has failed to meaningfully progress in terms of providing useful...
Persistent link: https://www.econbiz.de/10010270872
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Appropriate Fiscal Policy Over the Business Cycle : Proper Stimulus Policies Can Work
Graves, Philip E. - 2010
Fiscal policy has become quite controversial in the post-Keynesian era, the debate over the Obama stimulus package being a contentious recent example. Some pundits go so far as to take the position that macroeconomic theory has failed to meaningfully progress in terms of providing useful...
Persistent link: https://www.econbiz.de/10013139182
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Animal spirits and monetary policy
De Grauwe, Paul - 2008
We develop a behavioral macroeconomic model in which agents use simple but biased rules to forecast future output and inflation. This model generates endogenous waves of optimism and pessimism (Animal Spirits") that are generated by the correlation of biased beliefs. We contrast the dynamics of...
Persistent link: https://www.econbiz.de/10010272308
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Top-down versus bottom-up macroeconomics
De Grauwe, Paul - 2010
I distinguish two types of macroeconomic models. The first type are top-down models in which some or all agents are capable of understanding the whole picture and use this superior information to determine their optimal plans. The second type are bottom-up models in which all agents experience...
Persistent link: https://www.econbiz.de/10010272346
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Booms and busts: New Keynesian and behavioral explanations
De Grauwe, Paul - 2010
Capitalism is characterized by booms and busts. Periods of strong growth in output alternate with periods of declines in economic growth. Every macro-economic theory should attempt to explain these endemic business cycle movements. In this paper I present two paradigms that attempt to explain...
Persistent link: https://www.econbiz.de/10010274846
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Tax Smoothing in a Business Cycle Model with Capital-Skill Complementarity
Angelopoulos, Konstantinos; Asimakopoulos, Stylianos; … - 2014
This paper undertakes a normative investigation of the quantitative properties of optimal tax smoothing in a business cycle model with state contingent debt, capital-skill complementarity, endogenous skill formation and stochastic shocks to public consumption as well as total factor and capital...
Persistent link: https://www.econbiz.de/10010352346
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Risk Pooling, Leverage, and the Business Cycle
Dindo, Pietro; Modena, Andrea; Pelizzon, Loriana - 2019
, consumption, risk-free rate, and Sharpe ratio in a dynamic general equilibrium model of a productive economy. Due to their …/entrepreneurs. Exogenous systematic shocks change the relative size of the financial sector, and thus the equilibrium amount of pooled risk … amplification of consumption and mitigation of output fluctuations. In equilibrium, financial sector leverage also determines …
Persistent link: https://www.econbiz.de/10012052878
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Risk Matters: Breaking Certainty Equivalence
Parra-Alvarez, Juan Carlos; Polattimur, Hamza; Posch, Olaf - 2020
In this paper we use the property that certainty equivalence, as implied by a first-order approximation to the solution of stochastic discrete-time models, breaks in its equivalent continuous-time version. We study the extent to which a first-order approximated solution built by perturbation...
Persistent link: https://www.econbiz.de/10012214161
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Risk Matters : Breaking Certainty Equivalence
Parra-Alvarez, Juan Carlos - 2020
In this paper we use the property that certainty equivalence, as implied by a first-order approximation to the solution of stochastic discrete-time models, breaks in its equivalent continuous-time version. We study the extent to which a first-order approximated solution built by perturbation...
Persistent link: https://www.econbiz.de/10012834991
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Risk Pooling, Leverage, and the Business Cycle
Dindo, Pietro - 2020
. We develop a general equilibrium model of a productive economy where financial intermediaries provide costly risk …
Persistent link: https://www.econbiz.de/10012848320