KOENIG, Gilbert; ZEYNELOGLU, Irem - Bureau d'Économie Théorique et Appliquée (BETA), … - 2006
In this paper, we use a two country stochastic “new open economy macroeconomics” model with sticky wages and imperfect competition where public spending and private consumption appear in a non-separable way in individual preferences. We use this setup to define optimal fiscal policy in the...