Guo, Jang-Ting; Lansing, Kevin J - In: Studies in Nonlinear Dynamics & Econometrics 7 (2003) 2
This paper demonstrates how fiscal policy rules can be designed to eliminate all forms of endogenous fluctuations in a one-sector growth model with increasing returns-to-scale. When the policy rules are implemented, agents' optimal decisions depend only on the current state of the economy and...