Arbeitspapier

Capital Mobility and the Effectiveness of Fiscal Policy in Open Economies

This paper uses a dynamic general equilibrium two-country optimizing 'new-open economy macroeconomics? model to analyze the consequences of international capital mobility for the effectiveness of fiscal policy. Conventional wisdom suggests that higher capital mobility diminishes the effectiveness of fiscal policy. The model laid out in this paper provides an example that a higher degree of capital mobility can also increase the effectiveness of fiscal policy. This tends to be the case if the stance of monetary policy can be described by means of a simple monetary policy rule.

Language
Englisch

Bibliographic citation
Series: Kiel Working Paper ; No. 1164

Classification
Wirtschaft
Financial Aspects of Economic Integration
Open Economy Macroeconomics
Subject
Fiscal policy
Capital mobility
Financial market integration
Monetary Policy
Finanzpolitik
Wirtschaftspolitische Wirkungsanalyse
Neue Makroökonomik offener Volkswirtschaften
Offene Volkswirtschaft
Allgemeines Gleichgewicht
Internationale Kapitalmobilität
Internationaler Finanzmarkt
Geldpolitisches Ziel
Theorie

Event
Geistige Schöpfung
(who)
Pierdzioch, Christian
Event
Veröffentlichung
(who)
Kiel Institute for World Economics (IfW)
(where)
Kiel
(when)
2003

Handle
Last update
10.03.2025, 11:42 AM CET

Data provider

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Object type

  • Arbeitspapier

Associated

  • Pierdzioch, Christian
  • Kiel Institute for World Economics (IfW)

Time of origin

  • 2003

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