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Structural and Stabilization Aspects of Fiscal and Financial Policy in the Dependent Economy

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  • Buiter, Willem H

Abstract

The author considers the response of a dependent economy with overlapping generations households to fiscal and financial shocks, an d the influence of alternative budget balancing rules on the response of the system to external shocks. The government spends on traded and nontraded goods, and raises revenue through lump-sum taxes and through a distortionary tax on traded goods production. Even without government budget deficits, choices concerning the composition of public spending and the structure of taxation have important consequences for the real exchange rate, the allocation of production , the level and composition of consumption, and the current account. Copyright 1988 by Royal Economic Society.

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  • Buiter, Willem H, 1988. "Structural and Stabilization Aspects of Fiscal and Financial Policy in the Dependent Economy," Oxford Economic Papers, Oxford University Press, vol. 40(2), pages 220-245, June.
  • Handle: RePEc:oup:oxecpp:v:40:y:1988:i:2:p:220-45
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    References listed on IDEAS

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    1. Buiter, Willem H, 1984. "Saddlepoint Problems in Continuous Time Rational Expectations Models: A General Method and Some Macroeconomic Examples," Econometrica, Econometric Society, vol. 52(3), pages 665-680, May.
    2. Jacob A. Frenkel & Assaf Razin, 1984. "Fiscal Policies, Debt, and International Economic Interdependence," NBER Working Papers 1266, National Bureau of Economic Research, Inc.
    3. W. E. G. Salter, 1959. "Internal And External Balance: The Role Op Price And Expenditure Effects," The Economic Record, The Economic Society of Australia, vol. 35(71), pages 226-238, August.
    4. T. W.Swan, 1960. "Economic Control In A Dependent Economy," The Economic Record, The Economic Society of Australia, vol. 36(73), pages 51-66, March.
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    Cited by:

    1. Willem H. Buiter, 1988. "Centre For Labour Economics," NBER Working Papers 2578, National Bureau of Economic Research, Inc.
    2. Erling Steigum & Øystein Thøgersen, 2003. "Borrow and Adjust: Fiscal Policy and Sectoral Adjustment in an Open Economy," International Economic Review, Department of Economics, University of Pennsylvania and Osaka University Institute of Social and Economic Research Association, vol. 44(2), pages 699-724, May.
    3. Antonis Adam & Panos Hatzipanayotou & Thomas Moutos, 2015. "Labour Market Regulation, Fiscal Consolidation, and the Success of Current Account Adjustments," DEOS Working Papers 1517, Athens University of Economics and Business.
    4. Antonis Adam & Thomas Moutos, 2017. "The Modality of Fiscal Consolidation and Current Account Adjustment," CESifo Economic Studies, CESifo, vol. 63(2), pages 162-181.
    5. Buiter, W.H., 1988. "Some Thoughts On The Role Of Fiscal Policy In Stabilisation And Structural Adjustment In Developing Countries," Papers 312, London School of Economics - Centre for Labour Economics.
    6. Jacob A. Frenkel & Assaf Razin, 1986. "Fiscal Policies and Real Exchange Rates in the World Economy," NBER Working Papers 2065, National Bureau of Economic Research, Inc.
    7. Buiter, Willem H., 1988. "Can Public Spending Cuts be Inflationary?," CEPR Discussion Papers 225, C.E.P.R. Discussion Papers.
    8. Dai, Meixing, 1992. "Growth, External Debt Constraints and Budgetary Policies," MPRA Paper 14001, University Library of Munich, Germany.
    9. Camelia, BALTARETU, 2016. "A Review Of Theoretical Approaches About Seigniorage," Contemporary Economy Journal, Constantin Brancoveanu University, vol. 1(1), pages 82-88.
    10. Massimo Antonini, 2005. "Public Capital, Fiscal Deficit and Growth," DEGIT Conference Papers c010_055, DEGIT, Dynamics, Economic Growth, and International Trade.

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