Peter, Claeys; Alessandro, Maravalle - Department of Communication, University of Teramo - 2011
The Financial Crisis has hit particularly hard countries like Ireland or Spain. Procyclical fiscal policy has … an RBC model of a small open economy, following Mendoza (1991), and introduce the effect of fiscal policy decisions that … response to supply shocks. Procyclical fiscal policy distorts intertemporal allocation decisions. Temporary spending boosts in …