A Monetary Model of Exchange Rate and Balance of Payments Adjustment
In this note I explore how a non-constant rate of time preference on the part of policymakers affects economic growth. In a simple dynamic general equilibrium model I show that if the incumbent government has a rate of time preference in the form of a quasi-hyperbolic discounting function, tax rates can be substantially higher and economic growth considerably lower than the standard case of exponential discounting.
Volume (Year): 11 (2006)
Issue (Month): 1 (March)
|Contact details of provider:|| Postal: |
Web page: http://www.economicissues.org.uk
More information through EDIRC
References listed on IDEAS
Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:
- Robert J. Barro, 1999. "Ramsey Meets Laibson In The Neoclassical Growth Model," The Quarterly Journal of Economics, MIT Press, vol. 114(4), pages 1125-1152, November.
- Rebelo, Sergio, 1991.
"Long-Run Policy Analysis and Long-Run Growth,"
Journal of Political Economy,
University of Chicago Press, vol. 99(3), pages 500-521, June.
- Rogoff, Kenneth, 1985. "The Optimal Degree of Commitment to an Intermediate Monetary Target," The Quarterly Journal of Economics, MIT Press, vol. 100(4), pages 1169-89, November.
- Daniel J. Benjamin & David I. Laibson, 2003. "Good policies for bad governments: behavioral political economy," Conference Series ; [Proceedings], Federal Reserve Bank of Boston, vol. 48(Jun).
When requesting a correction, please mention this item's handle: RePEc:eis:articl:106nocetti. 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: (Dan Wheatley)
If references are entirely missing, you can add them using this form.