Business Cycles and Fiscal Policy in an Open Economy
Do business cycle fluctuations leave a role and a welfare case for an active stabilization policy by means of fiscal policy instruments? We address this issue in a two-sector open economy model with price-taking firms and imperfect competition in the labour market. Fiscal policies are shown to affect the equilibrium distribution of prices and hence output in the case of both supply (productivity) and demand (preferences) shocks.
|Date of creation:||1998|
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- Jonsson, G. & Klein, P., 1995.
"Stochastic Fiscal Policy and the Swedish Business Cycle,"
592, Stockholm - International Economic Studies.
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- John Y. Campbell, 1992. "Inspecting the Mechanism: An Analytical Approach to the Stochastic Growth Model," NBER Working Papers 4188, National Bureau of Economic Research, Inc.
- Campbell, John, 1994. "Inspecting the Mechanism: An Analytical Approach to the Stochastic Growth Model," Scholarly Articles 3196342, Harvard University Department of Economics.
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