Advanced Search
MyIDEAS: Login to save this article or follow this journal

The Generational Effects of Fiscal Policy in a Small Open Economy

Contents:

Author Info

  • Gerhard Glomm

    (Department of Economics, Indiana University, Bloomington, IN, USA)

  • Felix Rioja

    ()
    (Department of Economics, Andrew Young School of Policy Studies, Georgia State University, Atlanta, GA, USA)

Abstract

The reform of the fiscal system has for many years occupied center stage in policy discussions in developing countries. The authors employ a simple overlapping generations (OLG) model in a small open economy setting to study the impact of fiscal policy reform on the welfare of various generations and on the country’s growth rate. The authors find that while reallocating public expenditures from transfers to productive expenditures has sizable positive growth effects, individuals who are retired at the time of the policy change experience a welfare loss. However, younger generations experience larger welfare gains. The authors also find that running a public debt to finance transfer payments can decrease growth substantially and only slightly increase welfare of retirees. However, if debt is used to finance education expenditures or infrastructure investment, growth and welfare increase but only in the short run.

Download Info

If 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.
File URL: http://pfr.sagepub.com/content/40/2/151.abstract
Download Restriction: no

Bibliographic Info

Article provided by in its journal Public Finance Review.

Volume (Year): 40 (2012)
Issue (Month): 2 (March)
Pages: 151-176

as in new window
Handle: RePEc:sae:pubfin:v:40:y:2012:i:2:p:151-176

Contact details of provider:

Related research

Keywords: fiscal policy; transfer payments; education; infrastructure; small open economy;

References

No references listed on IDEAS
You can help add them by filling out this form.

Citations

Lists

This item is not listed on Wikipedia, on a reading list or among the top items on IDEAS.

Statistics

Access and download statistics

Corrections

When requesting a correction, please mention this item's handle: RePEc:sae:pubfin:v:40:y:2012:i:2:p:151-176. See general information about how to correct material in RePEc.

For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (SAGE Publications).

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 references are entirely missing, you can add them using this form.

If the full references list an item that is present in RePEc, but the system did not link 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 profile, as there may be some citations waiting for confirmation.

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