Public finance in a Keynesian temporary equilibrium

Temporary financial equilibrium

In a two-period pure exchange economy with financial assets, a temporary financial equilibrium is an equilibrium of the current spot and security markets given forecasts of future prices and returns. The temporary equilibrium model can then be interpreted as a Walrasian model where preferences depend on prices. This idenfication implies, among other consequences, the generic determinateness of ...

Connecting Social Provisioning and Functional Finance in a Post-Keynesian â•fi Institutional Analysis of the Public Sector

Equilibrium corporate finance

We study a general equilibrium model with production where financial markets are incomplete. At a competitive equilibrium firms take their production and financial decisions so as to maximize their value. We show that shareholders unanimously support value maximization. Furthermore, competitive equilibria are constrained Pareto efficient. Finally the Modigliani-Miller theorem typically does not...

New Keynesian economics: Between equilibrium and disequilibrium

In an attempt to explain and forecast the behavior of economic variables and of the economy as a whole, each school of economics creates its own system of paradigms, premises and models. The New Keynesian school of thought developed from the traditional Keynesian insights tries to offer additional explanations, based on microeconomic foundations, for such phenomena as economy-wide fluctuations ...

Public Finance

Public Finance Harvey Rosen Chapter One: Introduction 1. This book is about the taxing and spending activity of government, a subject usually called public finance. This term is something of a misnomer, because the fundamental issues are not financial (that is, relating to money). Rather, the key problems relate to the use real resources. P4 2. Our focus is on the microeconomic functions of gov...