This article is concerned with the application of fiscal policy instruments in stabilisation policy. Theoretical and practical considerations suggest that the scope for fiscal policy may be limited, but analysis of the actual performance of Thailand shows that an active use has been made of it....

This paper develops a model for balance-of-payments (BOP) crises triggered by an external shock. Whether an external shock induces a BOP crisis depends crucially on the sequence of policy actions taken by the government's monetary and fiscal authorities. If the fiscal authority moves first and...

Trade, exchange rate, fiscal, and agricultural sector policy reforms are the pillars of structural adjustment programs in Africa. Results indicate that trade and exchange rate reforms are associated with a large decline in economic rents and a shift in relative prices that favor the rural and...

This article reviews several familiar plans to alter the structure of taxation, including the flat tax, a VAT, and the USA Tax. With the significant exception of a simplified income tax system, every plan to replace the current U.S. federal tax system would move us in precisely the wrong...

We construct an intertemporal general equilibrium model designed to examine an economy in transition from central planning to being market oriented. The model considers one sector facing an output price control in the transition period, while the other sector has free output pricing. Interest...

This article studies the properties of optimal fiscal policy in a stochastic growth model when the government cannot commit itself beyond the next period's capital income tax rate. We find that the results contrast markedly with those under full commitment. First, capital income tax rates are...

In this paper we study the transmission mechanism of fiscal policy based on possible changes in the elasticity of demand. These are obtained by assuming that firms face a balance of public and private demands, each characterized by different price elasticity. We show that in this set-up there...

In this paper we study growth and welfare effects of fiscal policy in an endogenous growth model with public capital and environmental pollution. As to pollution we assume that it is due to aggregate production. Pollution does not have direct effects as concerns production possibilities but it...

Mainstream macroeconomic theory understands the economy as a phenomenon tractable by analysis adequately enough to be manageable by macroeconomic policy guided by this analysis. We explore why this epistemological approach of the economy has remained dominant in mainstream economics despite...