Andrés, J., Doménech, R. and Leith, C. (2006) Fiscal policy, macroeconomic stability and finite horizons. Scottish Journal of Political Economy, 53(1), pp. 72-89. (doi: 10.1111/j.1467-9485.2005.00371.x)
Full text not currently available from Enlighten.
Abstract
In this paper we analyse the stabilisation properties of distortionary taxes in a new-Keynesian model with overlapping generations of finitely lived consumers. In this framework, government debt is part of net wealth and this adds a number of interesting channels through which fiscal policy could affect output and inflation. Output volatility, in the presence of technology shocks, is not substantially affected by the operation of automatic stabilisers, but we find interesting composition effects. While the presence of finitely lived households strengthens the stabilisation performance of distortionary taxes through the reduction of the volatility of consumption, it does so at the cost of more volatile investment and real money balances.
| Item Type: | Articles |
|---|---|
| Status: | Published |
| Refereed: | Yes |
| Glasgow Author(s) Enlighten ID: | Leith, Professor Campbell |
| Authors: | Andrés, J., Doménech, R., and Leith, C. |
| Subjects: | H Social Sciences > HB Economic Theory |
| College/School: | College of Social Sciences > Adam Smith Business School > Economics |
| Journal Name: | Scottish Journal of Political Economy |
| ISSN: | 0036-9292 |
| ISSN (Online): | 1467-9485 |
| Published Online: | 09 January 2006 |
University Staff: Request a correction | Enlighten Editors: Update this record
Funder and Project Information
Funder and Project Information