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Intertemporal budget policies and macroeconomic adjustment in a small open economy

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  • Bianconi, Marcelo
  • Fisher, Walter H.

Abstract

This paper analyzes the role of nominal assets in ranking intertemporal budget policies in a growing open economy. The budget policies are ranked in terms of the public's intertemporal stock of tax liabilities. Our main result is that, in a small open economy, the valuation of private and public assets is in terms of the exogenous foreign price level under purchasing power parity. This constraint limits the scope of government to influence the real value of assets using fiscal and monetary policy shocks.
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  • Bianconi, Marcelo & Fisher, Walter H., 2005. "Intertemporal budget policies and macroeconomic adjustment in a small open economy," Journal of International Money and Finance, Elsevier, vol. 24(1), pages 1-17, February.
    • Handle: RePEc:eee:jimfin:v:24:y:2005:i:1:p:1-17
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    1. Bianconi, Marcelo & Fisher, Walter H., 2005. "Intertemporal budget policies and macroeconomic adjustment in a small open economy," Journal of International Money and Finance, Elsevier, vol. 24(1), pages 1-17, February.
    2. Marcelo Bianconi & Walter H. Fisher, 2014. "Intertemporal Budget Policies and Macroeconomic Adjustment in Indebted Open Economies," Review of International Economics, Wiley Blackwell, vol. 22(1), pages 116-130, February.
    3. Shu‐hua Chang & Juin‐jen Chang, 2015. "Optimal government spending in an economy with imperfectly competitive goods and labor markets," Southern Economic Journal, John Wiley & Sons, vol. 82(2), pages 385-407, October.

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    More about this item

    JEL classification:

    • E5 - Macroeconomics and Monetary Economics - - Monetary Policy, Central Banking, and the Supply of Money and Credit
    • E6 - Macroeconomics and Monetary Economics - - Macroeconomic Policy, Macroeconomic Aspects of Public Finance, and General Outlook
    • F4 - International Economics - - Macroeconomic Aspects of International Trade and Finance

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