Fiscal Policies in a Stochastic Model with Hyperbolic Discounting
AbstractIn this paper, we study the effects of fiscal policies on economy in a stochastic model with hyperbolic discounting rate. With specific assumptions on the production technology, preferences, and stochastic shocks, we derive the explicit solutions to the growth rates of consumption and savings and equilibrium returns on all assets, and give the effects of fiscal policies and discounting rate on growth.
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Bibliographic InfoPaper provided by China Economics and Management Academy, Central University of Finance and Economics in its series CEMA Working Papers with number 103.
Length: 23 pages
Date of creation: 1998
Date of revision:
Fiscal policies; Hyperbolic discounting; Stochastic growth;
Find related papers by JEL classification:
- D91 - Microeconomics - - Intertemporal Choice and Growth - - - Intertemporal Consumer Choice; Life Cycle Models and Saving
- G11 - Financial Economics - - General Financial Markets - - - Portfolio Choice; Investment Decisions
- H0 - Public Economics - - General
- O0 - Economic Development, Technological Change, and Growth - - General
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