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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Find related papers by JEL classification: E32 - Macroeconomics and Monetary Economics - - Prices, Business Fluctuations, and Cycles - - - Business Fluctuations; Cycles E62 - Macroeconomics and Monetary Economics - - Macroeconomic Policy, Macroeconomic Aspects of Public Finance, and General Outlook - - - Fiscal Policy
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