Arbeitspapier
Government Spending and the Taylor Principle
This paper explores how government size affects the scope for equilibrium indeterminacy in a New Keynesian economy where part of the population live hand-to-mouth. I find that in this framework, a larger public sector may widen the scope for self-fulfilling prophecies to occur. This takes place even though taxes serve to reduce swings in current income. In general, government provision of goods that are Edgeworth substitutes for private consumption tend to narrow the scope for indeterminacy, while government goods that are Edgeworth complements for private consumption increase the problem of indeterminacy. Hence monetary policy should be conducted with an eye to the amount and composition of government consumption.
- ISBN
-
82-7553-369-4
- Sprache
-
Englisch
- Erschienen in
-
Series: Working Paper ; No. 2006/11
- Klassifikation
-
Wirtschaft
Business Fluctuations; Cycles
Monetary Policy
Comparative or Joint Analysis of Fiscal and Monetary Policy; Stabilization; Treasury Policy
- Thema
-
Taylor principle
public expenditures
fiscal policy rules
rule-of-thumb consumers
- Ereignis
-
Geistige Schöpfung
- (wer)
-
Natvik, Gisle James
- Ereignis
-
Veröffentlichung
- (wer)
-
Norges Bank
- (wo)
-
Oslo
- (wann)
-
2006
- Handle
- Letzte Aktualisierung
-
10.03.2025, 11:45 MEZ
Datenpartner
ZBW - Deutsche Zentralbibliothek für Wirtschaftswissenschaften - Leibniz-Informationszentrum Wirtschaft. Bei Fragen zum Objekt wenden Sie sich bitte an den Datenpartner.
Objekttyp
- Arbeitspapier
Beteiligte
- Natvik, Gisle James
- Norges Bank
Entstanden
- 2006
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