Intertemporal Budget Policies and Macroeconomic Adjustment in Indebted Open Economies
We analyze the role of government intertemporal budget policies in a growing open economy including nominal assets in the presence of an upward sloping supply of debt. This introduces transitional dynamics that influence the effects of government policy instruments on the long term fiscal liability. In particular, shifts in capital income taxes can lead to dynamic scoring effects through the evolution of foreign debt. We show that a combination of tax-cumexpenditure, or government expenditure alone can balance the long term government budget constraint. However, for certain combinations of parameter values, the capital income tax alone cannot balance the intertemporal budget.
|Date of creation:||Jun 2011|
|Date of revision:|
|Contact details of provider:|| Postal: Josefstädterstr. 39, A-1080 Vienna, Austria|
Phone: ++43 - (0)1 - 599 91 - 0
Fax: ++43 - (0)1 - 599 91 - 555
Web page: http://www.ihs.ac.at
More information through EDIRC
|Order Information:|| Postal: Institute for Advanced Studies - Library, Josefstädterstr. 39, A-1080 Vienna, Austria|
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.:
- Ireland, Peter N., 1994. "Supply-side economics and endogenous growth," Journal of Monetary Economics, Elsevier, vol. 33(3), pages 559-571, June.
- Bianconi, Marcelo, 1999.
"Intertemporal budget policies in an endogenous growth model with nominal assets,"
International Review of Economics & Finance,
Elsevier, vol. 8(1), pages 25-43, January.
- Marcelo Bianconi, 1998. "Intertemporal Budget Policies in an Endogenous Growth Model with Nominal Assets," Discussion Papers Series, Department of Economics, Tufts University 9802, Department of Economics, Tufts University.
- Jonas Agell & Mats Persson, 2000.
"On the Analytics of the Dynamic Laffer Curve,"
CESifo Working Paper Series
383, CESifo Group Munich.
- 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.
- Marcelo Bianconi & Walter H. Fisher, 2003. "Intertemporal Budget Policies and Macroeconomic Adjustment in a Small Open Economy," Discussion Papers Series, Department of Economics, Tufts University 0312, Department of Economics, Tufts University.
- Fisher, Walter H. & Bianconi, Marcelo, 2001. "Intertemporal Budget Policies and Macroeconomic Adjustment in a Small Open Economy," Economics Series 96, Institute for Advanced Studies.
- Chen, Shu-hua & Shaw, Ming-fu & Lai, Ching-chong & Chang, Juin-jen, 2008. "Interest-rate rules and transitional dynamics in an endogenously growing open economy," Journal of International Money and Finance, Elsevier, vol. 27(1), pages 54-75, February.
- Novales, Alfonso & Ruiz, Jesus, 2002.
"Dynamic Laffer curves,"
Journal of Economic Dynamics and Control,
Elsevier, vol. 27(2), pages 181-206, December.
- George J. Hall & Thomas J. Sargent, 2011.
"Interest Rate Risk and Other Determinants of Post-WWII US Government Debt/GDP Dynamics,"
American Economic Journal: Macroeconomics,
American Economic Association, vol. 3(3), pages 192-214, July.
- Thomas J. Sargent & George J. Hall, 2010. "Interest rate risk and other determinants of post WWII U.S. government debt/GDP dynamics," 2010 Meeting Papers 208, Society for Economic Dynamics.
- George J. Hall & Thomas J. Sargent, 2010. "Interest Rate Risk and Other Determinants of Post-WWII U.S. Government Debt/GDP Dynamics," NBER Working Papers 15702, National Bureau of Economic Research, Inc.
- George J. Hall & Thomas J. Sargent, 2010. "Interest rate risk and other determinants of post WWII U.S. government debt/GDP dynamics," Working Papers 01, Brandeis University, Department of Economics and International Businesss School.
- Jonathan David Ostry & Atish R. Ghosh & Jun Il Kim & Mahvash Qureshi, 2010. "Fiscal Space," IMF Staff Position Notes 2010/11, International Monetary Fund.
- Leonardo Bartolini & Amartya Lahiri, 2006. "Twin deficits, twenty years later," Current Issues in Economics and Finance, Federal Reserve Bank of New York, vol. 12(Oct).
- Jones, Larry E & Manuelli, Rodolfo E & Rossi, Peter E, 1993. "Optimal Taxation in Models of Endogenous Growth," Journal of Political Economy, University of Chicago Press, vol. 101(3), pages 485-517, June.
- Bruce, Neil & Turnovsky, Stephen J, 1999. "Budget Balance, Welfare, and the Growth Rate: "Dynamic Scoring" of the Long-Run Government Budget," Journal of Money, Credit and Banking, Blackwell Publishing, vol. 31(2), pages 162-86, May.
- Slemrod,Joel, 1997.
"Tax Progressivity and Income Inequality,"
Cambridge University Press, number 9780521587761, November.
- Larry E. Jones & Rodolfo Manuelli, 1990. "A Convex Model of Equilibrium Growth," NBER Working Papers 3241, National Bureau of Economic Research, Inc.
When requesting a correction, please mention this item's handle: RePEc:ihs:ihsesp:271. 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: (Doris Szoncsitz)
If references are entirely missing, you can add them using this form.