Should the government run fiscal deficits in response to an adverse external shock that warrants transfer of resuorces from production of non-traded to traded goods? This paper considers nprmative fiscal policy implications of sectoral adjustment costs in a two-sector model with overlapping...

This paper looks at intergenerational welfare effects of increased public dept when union power in pay bargaining generates structural unemployment. Dept policy works through capital accumulation as well as the price of a fixed asset that is owned the old generation. Under a reasonable...

This paper looks at intergenerational welfare effects of increased public debt when union power in pay bargaining generates structural unemployment. Debt policy works through capital accumulation as well as the price of a fixed asset that is owned by the old generation. Under a reasonable...