We re-examine the destabilizing role of balanced-budget fiscal policy rules based on consumption taxation. Using a one-sector model with infinitely-lived households, and assuming that preferences are of the Greenwood-Hercovitz-Huffman [8] (GHH) type, we show that non-linear consumption taxation...

In this paper we consider a Ramsey-type aggregate model with general preferences and technology, endogenous labor and factor-specificproductive external effects arising from average capital and labor. First, we show that indeterminacy cannot arise when there are onlycapital externalities but...

We re-examine the destabilizing role of balanced-budget fiscal policy rules based on consumption taxation. Using a one-sector model with infinitely-lived households, we consider a specification of preferences derived from Jaimovich (2008) [14] and Jaimovich and Rebelo (2009) [15] which is...