The role of fiscal policy in an incomplete markets framework

A general-equilibrium model is developed to highlight the link between neo-Keynesian models of unemployment and recent results on the constrained suboptimality of competitive economies with incomplete asset markets. Although the model deviates from the Arrow-Debreu paradigm only by the absence of some contingent claims, the competitive equilibrium exhibits underemployment and balanced-budget fiscal policies have Keynesian effects which are Pareto improving.

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Year of publication:	1993
Authors:	Thomas, Charles P.
Institutions:	Federal Reserve Board (Board of Governors of the Federal Reserve System)
Subject:	Fiscal policy

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Extent:	text/html application/pdf
Series:	International Finance Discussion Papers.
Type of publication:	Book / Working Paper
Notes:	Number 451
Source:	RePEc - Research Papers in Economics

Persistent link: https://ebvufind01.dmz1.zbw.eu/10005498751