Private and Public Consumption and Counter-Ciclical Fiscal Policy

Arbeitspapier

In this paper we set up a NK-DSGE model in which the consumer derives utility from a consumption basket made of public and private consumption, there is monopolistic competiton in the intermediate good sector, Calvo-Yun price setting, endogenous labour supply and Taylor rule for monetary policy. We analyse the effects of a counterciclical fiscal policy rule and how varying the degree of counterciclicality affects the determinacy of the rational expectations equilbrium and the ability to respond to technological and government spending shocks. A broad conclusion is that desiderability of pro/counter ciclical stance of fiscal policy cannot accurately be drawn without taking into account the quality of the public expenditure and the way it interacts with private consumption.

Object Details

• Language: Englisch

References and Relationships

• Bibliographic citation: Series: Quaderni - Working Paper DSE ; No. 588

Classification and Topics

• Classification: Wirtschaft

Contributors, Places and Time

• Event: Geistige Schöpfung
• (who): Marattin, Luigi
• Event: Veröffentlichung
• (who): Alma Mater Studiorum - Università di Bologna, Dipartimento di Scienze Economiche (DSE)
• (where): Bologna
• (when): 2007

Further information

• DOI: doi:10.6092/unibo/amsacta/4696
• Handle: http://hdl.handle.net/10419/159429
• Last update: 10.03.2025, 11:44 AM CET