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Optimal Government Spending in a Business Cycle Model

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Abstract

We build a model of optimal time-consistent public spending in a dynamic general equilibrium model of the business cycle. We analyze the welfare properties of optimal public spending and characterize the optimal response of spending to exogenous economic shocks. Nous analysons les dépenses publiques optimales et intertemporellement cohérentes dans le contexte d'un modèle dynamique d'équilibre général du cycle économique. Nous calculons les effets des dépenses optimales sur le bien-être social et nous caractérisons la réponse optimale des dépenses publiques aux chocs exogènes.

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Bibliographic Info

Paper provided by CREFE, Université du Québec à Montréal in its series Cahiers de recherche CREFE / CREFE Working Papers with number 44.

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Length: 46 pages
Date of creation: Sep 1996
Date of revision:
Handle: RePEc:cre:crefwp:44

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Related research

Keywords: business cycles; general equilibrium; optimal policy; governemnt spending;

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Cited by:
  1. Sanghamitra Bandyopadhyay & Joan Esteban, 2009. "Redistributive Taxation, Public Expenditure, and Size of Governent," UFAE and IAE Working Papers 799.09, Unitat de Fonaments de l'Anàlisi Econòmica (UAB) and Institut d'Anàlisi Econòmica (CSIC).
  2. Sanghamitra Bandyopadhyay & Joan Esteban, 2007. "Redistributive Taxation and Public Expenditures," Economics Series Working Papers 366, University of Oxford, Department of Economics.
  3. Amir Kia, 2006. "Deficits, Debt Financing, Monetary Policy and Inflation in Developing Countries: Internal or External Factors? Evidence from Iran," Carleton Economic Papers 06-03, Carleton University, Department of Economics, revised Nov 2006.
  4. Hafedh Bouakez & Nooman Rebei, 2007. "Why does private consumption rise after a government spending shock?," Canadian Journal of Economics, Canadian Economics Association, vol. 40(3), pages 954-979, August.
  5. Amir Kia, 2004. "Deficits, Debt Financing, Monetary Policy and Inflation in Developing Countries: Internal or External Factors?," Carleton Economic Papers 04-15, Carleton University, Department of Economics.
  6. Suescun, Rodrigo, 2005. "Fiscal space for investment in infrastructure in Colombia," Policy Research Working Paper Series 3629, The World Bank.
  7. Kia, Amir, 2006. "Deficits, debt financing, monetary policy and inflation in developing countries: Internal or external factors?: Evidence from Iran," Journal of Asian Economics, Elsevier, vol. 17(5), pages 879-903, November.

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