IDEAS home Printed from https://ideas.repec.org/a/bla/metroe/v59y2008i4p713-735.html
   My bibliography  Save this article

Destabilizing Effects On Income Adjustment Process With Fiscal Policy Lags

Author

Listed:
  • Akio Matsumoto

Abstract

Since a finite time delay in government purchases of goods and service cannot be ignored, this paper studies how such a time lag in a fiscal policy affects the stability of the income adjustment process. Formulating the income adjustment process with time delay, it adopts two different approaches: one is a fixed time lag and the other is a continuously distributed lag. It is demonstrated that the continuously distributed time lag has the stronger destabilizing effect if the adjustment of the government expenditure is slow while the fixed lag has the stronger destabilizing effect if this adjustment is rapid.

Suggested Citation

  • Akio Matsumoto, 2008. "Destabilizing Effects On Income Adjustment Process With Fiscal Policy Lags," Metroeconomica, Wiley Blackwell, vol. 59(4), pages 713-735, November.
    • Handle: RePEc:bla:metroe:v:59:y:2008:i:4:p:713-735
    DOI: 10.1111/j.1467-999X.2008.00334.x
    as

    Download full text from publisher

    File URL: https://doi.org/10.1111/j.1467-999X.2008.00334.x
    Download Restriction: no
    File URL: https://libkey.io/10.1111/j.1467-999X.2008.00334.x?utm_source=ideas
    LibKey link: if access is restricted and if your library uses this service, LibKey will redirect you to where you can use your library subscription to access this item
    ---><---

    References listed on IDEAS

    as
    1. Yoshida, Hiroyuki & Asada, Toichiro, 2007. "Dynamic analysis of policy lag in a Keynes-Goodwin model: Stability, instability, cycles and chaos," Journal of Economic Behavior & Organization, Elsevier, vol. 62(3), pages 441-469, March.
    Full references (including those not matched with items on IDEAS)

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. Igor Kotlán & Zuzana Machová, 2014. "Horizont daňové politiky v zemích OECD [Tax Policy Horizon in the OECD Countries]," Politická ekonomie, Prague University of Economics and Business, vol. 2014(2), pages 161-173.
    2. De Cesare, Luigi & Sportelli, Mario, 2012. "Fiscal policy lags and income adjustment processes," Chaos, Solitons & Fractals, Elsevier, vol. 45(4), pages 433-438.
    3. Veronika Nálepová, 2017. "Affects Corporate Taxation Economic Growth? - Dynamic Approach for OECD Countries," European Journal of Business Science and Technology, Mendel University in Brno, Faculty of Business and Economics, vol. 3(2), pages 132-147.
    4. Sportelli, Mario & De Cesare, Luigi, 2019. "Fiscal policy delays and the classical growth cycle," Applied Mathematics and Computation, Elsevier, vol. 354(C), pages 9-31.
    5. Akio Matsumoto & Ferenc Szidarovszky, 2016. "Delay Dynamics in a Classical IS-LM Model with Tax Collections," Metroeconomica, Wiley Blackwell, vol. 67(4), pages 667-697, November.

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Barrales-Ruiz, Jose & Arnim, Rudiger von, 2021. "Endogenous fluctuations in demand and distribution: An empirical investigation," Structural Change and Economic Dynamics, Elsevier, vol. 58(C), pages 204-220.
    2. He, Xue-Zhong & Zheng, Min, 2010. "Dynamics of moving average rules in a continuous-time financial market model," Journal of Economic Behavior & Organization, Elsevier, vol. 76(3), pages 615-634, December.
    3. Gomes, Orlando, 2013. "Information stickiness on general equilibrium and endogenous cycles," Economics - The Open-Access, Open-Assessment E-Journal (2007-2020), Kiel Institute for the World Economy (IfW Kiel), vol. 7, pages 1-43.
    4. Shunsuke Shinagawa & Eiji Tsuzuki, 2019. "Policy Lag and Sustained Growth," Italian Economic Journal: A Continuation of Rivista Italiana degli Economisti and Giornale degli Economisti, Springer;Società Italiana degli Economisti (Italian Economic Association), vol. 5(3), pages 403-431, October.
    5. ZHANG, Lu & GUO, Qing & ZHANG, Junbiao & HUANG, Yong & XIONG, Tao, 2015. "Did China׳s rare earth export policies work? — Empirical evidence from USA and Japan," Resources Policy, Elsevier, vol. 43(C), pages 82-90.
    6. Murakami Hiroki, 2017. "Time elements and oscillatory fluctuations in the Keynesian macroeconomic system," Studies in Nonlinear Dynamics & Econometrics, De Gruyter, vol. 21(2), pages 1-22, April.
    7. Daniele Tavani & Luca Zamparelli, 2020. "Growth, income distribution, and the ‘entrepreneurial state’," Journal of Evolutionary Economics, Springer, vol. 30(1), pages 117-141, January.
    8. Kai Li, 2014. "Asset Price Dynamics with Heterogeneous Beliefs and Time Delays," PhD Thesis, Finance Discipline Group, UTS Business School, University of Technology, Sydney, number 1-2014.
    9. Giovanni Dosi & Mauro Sodini & Maria Virgillito, 2015. "Profit-driven and demand-driven investment growth and fluctuations in different accumulation regimes," Journal of Evolutionary Economics, Springer, vol. 25(4), pages 707-728, September.
    10. Hommes, Cars & Li, Kai & Wagener, Florian, 2022. "Production delays and price dynamics," Journal of Economic Behavior & Organization, Elsevier, vol. 194(C), pages 341-362.
    11. He, Xue-Zhong & Li, Kai & Wei, Junjie & Zheng, Min, 2009. "Market stability switches in a continuous-time financial market with heterogeneous beliefs," Economic Modelling, Elsevier, vol. 26(6), pages 1432-1442, November.
    12. Saiki, Y. & Chian, A.C.L. & Yoshida, H., 2011. "Economic intermittency in a two-country model of business cycles coupled by investment," Chaos, Solitons & Fractals, Elsevier, vol. 44(6), pages 418-428.
    13. Yannis Dafermos, 2015. "Debt cycles, instability and fiscal rules: a Godley-Minsky model," Working Papers 20151509, Department of Accounting, Economics and Finance, Bristol Business School, University of the West of England, Bristol.
    14. He, Xue-Zhong & Li, Kai, 2012. "Heterogeneous beliefs and adaptive behaviour in a continuous-time asset price model," Journal of Economic Dynamics and Control, Elsevier, vol. 36(7), pages 973-987.
    15. Matsumoto, Akio, 2009. "Note on Goodwin's 1951 nonlinear accelerator model with an investment delay," Journal of Economic Dynamics and Control, Elsevier, vol. 33(4), pages 832-842, April.
    16. Carlos Eduardo Iwai Drumond & Cleiton Silva Jesus & João Basilio Pereima & Hiroyuki Yoshida, 2022. "Alternative monetary policy rules and expectational consistency," Evolutionary and Institutional Economics Review, Springer, vol. 19(1), pages 319-341, April.
    17. Colacchio, Giorgio, 2014. "Taxation, income redistribution and debt dynamics in a seven-equation model of the business cycle," Journal of Economic Behavior & Organization, Elsevier, vol. 106(C), pages 140-165.
    18. Alexander V. Ryzhenkov, 2022. "Increasing returns and business cycles in a family of Goodwinian models with Leontiev technology," Journal of Economic Structures, Springer;Pan-Pacific Association of Input-Output Studies (PAPAIOS), vol. 11(1), pages 1-47, December.
    19. Franke, Reiner, 2018. "Reviving Kalecki’s business cycle model in a growth context," Journal of Economic Dynamics and Control, Elsevier, vol. 91(C), pages 157-171.
    20. De Cesare, Luigi & Sportelli, Mario, 2012. "Fiscal policy lags and income adjustment processes," Chaos, Solitons & Fractals, Elsevier, vol. 45(4), pages 433-438.

    More about this item

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:bla:metroe:v:59:y:2008:i:4:p:713-735. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Wiley Content Delivery (email available below). General contact details of provider: http://www.blackwellpublishing.com/journal.asp?ref=0026-1386 .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.