Time consistent fiscal policies in a Ramsey economy
نویسندگان
چکیده
منابع مشابه
Time consistent fiscal policies in a Ramsey economy
This paper revisits a well-known case of optimal fiscal policy in a Ramsey model where consumer utility is defined over consumption and public goods. We show that normalising the size of the population to one eliminates the scope for active policy-making since the decentralised equilibrium coincides with social planning. Then, we modify the model to allow for a population of N > 1 agents, where...
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Delegating monetary policy to an independent central bank will not incur coordination problems with fiscal policy. The fiscal authority faces no incentive to try and expand the economy, as its efforts will be quickly countered by a contractionary monetary policy to maintain the inflation target. We argue that this proposition is not true in an open economy. When the external sector is added to ...
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ژورنال
عنوان ژورنال: Mathematical Social Sciences
سال: 2007
ISSN: 0165-4896
DOI: 10.1016/j.mathsocsci.2006.12.004