This paper examines the role for tax policies in productivity-shock driven economies with catching-up-with-the-Joneses utility functions. The optimal tax policy is shown to affect the economy countercyclically via procyclical taxes, i.e., “cooling down” the economy with higher taxes when it is “overheating” in booms and “stimulating” the economy with lower taxes in recessions to keep consumptio...

We revisit the macroeconomic effects of government consumption in the neoclassical growth model when agents face uninsured idiosyncratic investment risk. Under complete markets, a permanent increase in government consumption has no long-run effect on the interest rate and the capital-labor ratio, while it increases hours due to the negative wealth effect. These results are upset once we allow f...

The title compound, [Ag(C9H6NO)(C9H7NO)], crystallizes as a non-centrosymmetric polymorph. The structure was previously reported by Wu et al. [(2006). Acta Cryst. E62, m281-m282] in the centrosymmetric space group Pbcn. The Ag(I) ion displays a distorted tetra-hedral coordination geometry defined by two N and two O atoms from a neutral quinolin-8-ol ligand (HQ) and a deprotonated quinolin-8-ola...

Within the non-stochastic dynamic general equilibrium model framework this paper examines the implications of alternative fiscal consolidation programs for small open economy. The calibrated model enables realistically quantify the impact of the deficit financing and fiscal consolidation on consumption and saving of households, investment of firms and thereby on the capital stock and real inter...

Previous analyses of population aging mainly focused on the social security implications of the aging trend. This paper addresses aging in an open economy framework with two regions that have politically responsive fiscal policy regarding education finance. Demographic shocks start an economic growth process but results are sensitive to a critical parameter in the model that indicates return to...

This paper considers an endogenous growth model with productive government spending in which overlapping generations of agents vote sequentially on policy. With sequential majority voting, there is a multiplicity of politico-economic equilibria originating from self-fulfilling policy expectations. Some of these equilibria are Pareto-inefficient and there are endogenous cycles. A constitutional ...

Fiscal Union Consensus Design under the Risk of Autarky* Inspired by the current debate over the future of the monetary union in Europe, this paper provides a simple model for the determination of the conditions of survival of the common good, which requires the creation of an effective fiscal union. We highlight the importance of institutional design and varying decision weights for the enlarg...

The paper examines the interrelationship between fiscal and monetary policy in a two-country monetary union. The worst scenario occurs when an independent central bank (CB) sets the nominal interest rate and responds to rising government debt/GDP ratios by monetisation. The result is high inflation, high debt/GDP ratios and a large public sector. Government debt and inflation are contained if t...

This paper constructs a stochastic version of an endogenously growing economy with a public good that raises the productivity of private capital. We explore how growth and welfare are influenced by changes in the mean and variance of productive public spending under two alternative financing methods, mixed money–bond financing and wealth-tax financing. In addition, to evaluate the differences b...

Within a macroeconomic disequilibrium model it turns out that stationary and simple adaptive policies are not capable of stabilizing effkient steady states and lead to periodic or irregular fluctuations for large sets of policy parameters. The application of recent control methods for chaotic dynamical systems shows that the government can, in principle, stabilize an unstable Walrasian equilibr...