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Tax structure, optimal fiscal policy, and the business cycle

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  • Jang-Ting Guo
  • Kevin J. Lansing

Abstract

The development of a real business cycle model in which government fiscal variables such as tax rates and public expenditures are endogenous. The authors characterize the \"optimal\" behavior of these policy variables over the business cycle and relate this behavior to movements in private-sector variables like output, consumption, labor hours, and investment.

Suggested Citation

  • Jang-Ting Guo & Kevin J. Lansing, 1994. "Tax structure, optimal fiscal policy, and the business cycle," Economic Review, Federal Reserve Bank of Cleveland, vol. 30(Q IV), pages 2-14.
    • Handle: RePEc:fip:fedcer:y:1994:i:qiv:p:2-14:n:v.30no.4
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    References listed on IDEAS

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    6. Chari, V V & Christiano, Lawrence J & Kehoe, Patrick J, 1994. "Optimal Fiscal Policy in a Business Cycle Model," Journal of Political Economy, University of Chicago Press, vol. 102(4), pages 617-652, August.
    7. Kevin J. Lansing, 1994. "Optimal fiscal policy when public capital is productive: a business- cycle perspective," Working Papers (Old Series) 9406, Federal Reserve Bank of Cleveland.
    8. Rogerson, Richard, 1988. "Indivisible labor, lotteries and equilibrium," Journal of Monetary Economics, Elsevier, vol. 21(1), pages 3-16, January.
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    16. Ellen R. McGrattan & Richard Rogerson & Randall Wright, 1993. "Household production and taxation in the stochastic growth model," Staff Report 166, Federal Reserve Bank of Minneapolis.
    17. Jang-Ting Guo & Kevin J. Lansing, 1994. "The welfare effects of tax simplification: a general-equilibrium analysis," Working Papers (Old Series) 9409, Federal Reserve Bank of Cleveland.
    18. Zhu, Xiaodong, 1992. "Optimal fiscal policy in a stochastic growth model," Journal of Economic Theory, Elsevier, vol. 58(2), pages 250-289, December.
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    Cited by:

    1. Jones, John Bailey, 2002. "Has fiscal policy helped stabilize the postwar U.S. economy?," Journal of Monetary Economics, Elsevier, vol. 49(4), pages 709-746, May.

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