The economics of crowding out
AbstractWe consider fiscal policy in a non-monetary, general equilibrium framework with uncertainty, in which the financing of the government budget has no effects. We show that »crowding out» and »crowding in» depend on whether the fiscal policy requires a gestation period or whether its effect is contemporaneous with the taxation by which it is financed. The optimality conditions and the comparative statics of the equilibrium are entirely different for these two cases. In addition to this timing question, the optimality conditions depend on whether the public good has infrastructure effects and/or has intrinsic utility.
Download InfoIf you experience problems downloading a file, check if you have the proper application to view it first. In case of further problems read the IDEAS help page. Note that these files are not on the IDEAS site. Please be patient as the files may be large.
Bibliographic InfoArticle provided by Finnish Economic Association in its journal Finnish Economic Papers.
Volume (Year): 4 (1991)
Issue (Month): 1 (Spring)
Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:
- Kenneth L. Judd, 1983.
"Short-Run Analysis of Fiscal Policy in a Simple Perfect Foresight Model,"
559, Northwestern University, Center for Mathematical Studies in Economics and Management Science.
- Judd, Kenneth L, 1985. "Short-run Analysis of Fiscal Policy in a Simple Perfect Foresight Model," Journal of Political Economy, University of Chicago Press, vol. 93(2), pages 298-319, April.
- Aschauer, David Alan, 1989.
"Is public expenditure productive?,"
Journal of Monetary Economics,
Elsevier, vol. 23(2), pages 177-200, March.
- Benninga, Simon & Protopapadakis, Aris, 1986. "General equilibrium properties of the term structure of interest rates," Journal of Financial Economics, Elsevier, vol. 16(3), pages 389-410, July.
- Friend, Irwin & Blume, Marshall E, 1975. "The Demand for Risky Assets," American Economic Review, American Economic Association, vol. 65(5), pages 900-922, December.
- Andrew B. Abel, .
"The Implications of Insurance for the Efficacy of Fiscal Policy,"
Rodney L. White Center for Financial Research Working Papers
6-88, Wharton School Rodney L. White Center for Financial Research.
- Andrew B. Abel, 1988. "The Implications of Insurance for the Efficacy of Fiscal Policy," NBER Working Papers 2517, National Bureau of Economic Research, Inc.
- Andrew B. Abel, . "The Implications of Insurance for the Efficacy of Fiscal Policy," Rodney L. White Center for Financial Research Working Papers 06-88, Wharton School Rodney L. White Center for Financial Research.
- Grossman, Herschel I & Lucas, Robert F, 1974. "The Macro-Economic Effects of Productive Public Expenditures," The Manchester School of Economic & Social Studies, University of Manchester, vol. 42(2), pages 162-70, June.
- Barro, Robert J., 1974.
"Are Government Bonds Net Wealth?,"
3451399, Harvard University Department of Economics.
For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Editorial Secretary).
If references are entirely missing, you can add them using this form.