Destabilizing optimal policies in the business cycle

It is often believed that governments should either abstain from leading activist policies, or if they lead such policies, that these policies should somehow be “stabilizing”, in the sense of reducing the volatilities of some endogenous variables. We construct a model with explicit foundations where the optimal policies are activist, and they make both employment and output more volatile than in the no intervention case.

MoreLess

Year of publication:	2012
Authors:	Bénassy, Jean-Pascal
Published in:	Journal of Economic Dynamics and Control. - Elsevier, ISSN 0165-1889. - Vol. 36.2012, 9, p. 1364-1371
Publisher:	Elsevier
Subject:	Destabilizing optimal policies \| Business cycles \| Monetary policy

More details

Type of publication:	Article
Classification:	E32 - Business Fluctuations; Cycles ; E52 - Monetary Policy (Targets, Instruments, and Effects)
Source:	RePEc - Research Papers in Economics

Persistent link: https://www.econbiz.de/10011051961