IDEAS home Printed from https://ideas.repec.org/a/aea/aecrev/v83y1993i3p315-34.html
   My bibliography  Save this article

Fiscal Policy in General Equilibrium

Author

Listed:
  • Baxter, Marianne
  • King, Robert G

Abstract

This paper studies four classic fiscal-policy experiments within a quantitatively restricted neoclassical model. The authors' main findings are as follows: (1) permanent changes in government purchases can lead to short-run and long-run output multipliers that exceed one; (2) permanent changes in government purchases induce larger effects than temporary changes; (3) the financing decision is quantitatively more important than the resource cost of changes in government purchases; and (4) public investment has dramatic effects on private output and investment. These findings stem from important dynamic interactions of capital and labor absent in earlier equilibrium analyses of fiscal policy. Copyright 1993 by American Economic Association.

Suggested Citation

  • Baxter, Marianne & King, Robert G, 1993. "Fiscal Policy in General Equilibrium," American Economic Review, American Economic Association, vol. 83(3), pages 315-334, June.
  • Handle: RePEc:aea:aecrev:v:83:y:1993:i:3:p:315-34
    as

    Download full text from publisher

    File URL: http://links.jstor.org/sici?sici=0002-8282%28199306%2983%3A3%3C315%3AFPIGE%3E2.0.CO%3B2-A&origin=repec
    File Function: full text
    Download Restriction: Access to full text is restricted to JSTOR subscribers. See http://www.jstor.org for details.

    As the access to this document is restricted, you may want to look for a different version below or search for a different version of it.

    Other versions of this item:

    More about this item

    Lists

    This item is featured on the following reading lists or Wikipedia pages:
    1. Quantitative Macroeconomics and Real Business Cycles (QM&RBC)

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:aea:aecrev:v:83:y:1993:i:3:p:315-34. 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: (Michael P. Albert). General contact details of provider: http://edirc.repec.org/data/aeaaaea.html .

    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.

    We have no references for this item. You can help adding them by using 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 RePEc Author Service 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.

    IDEAS is a RePEc service hosted by the Research Division of the Federal Reserve Bank of St. Louis . RePEc uses bibliographic data supplied by the respective publishers.