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The potential interactions among fiscal policies, investments and economicgrowth are complex and manifold.In this paper, we will perform a systematic comparative analysis of the variouseconomic insights that arecurrently available on these complex relationships, both theoretically (by aselective...
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exchange rates for a small open economy. We analyse the effects of fiscal expansions using a New Keynesian model and find that …
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open the economy is. If the government cannot borrow from abroad in its own currency, stability requires interest rate …
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, which justifies tight debt constraints. In particular, a balanced budget policy stabilizes the economy under cost …
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versions of a simple New Keynesian small open economy model on quarterly data for the period 1994Q3-2008Q2: A basic version and …
Persistent link: https://www.econbiz.de/10011382024
In standard macroeconomic models, debt sustainability and price level determinacy are achieved when fiscal policy avoids explosive debt and monetary policy controls inflation, irrespective of the relative strengths of each policy stance. We examine how these policy requirements for equilibrium...
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