Useful Government Spending and Macroeconomic (In)stability under Balanced-Budget Rules
2006/09/12
研討會日期 : 2006-09-12
時間 : 15:00
主講人 : Prof. Jang-Ting Guo
地點 : B棟110會議室
演講者簡介 : Prof. Jang-Ting Guo 為Ph.D. in Economics, University of California, Los Angeles（1993）。
現為Professor, University of California, Riverside。
其主要研究領域為Sunspots, Self-Fulfilling Beliefs in Real Business Cycle Models, Indeterminacy and Stabilization Policy, International Business Cycles, Dynamic Optimal Fiscal Policy, Welfare and Business Cycles, Monopolistic Competition, Firm Size and Welfare, and Exchange-Rate Exposure of Firms。
演講摘要 : It has been shown that an otherwise standard one-sector real business cycle model may exhibit indeterminacy and sunspots under a balanced-budget rule that consists of fixed and "wasteful" government spending and proportional income taxation. However, the economy always displays saddle-path stability and equilibrium uniqueness if the government finances endogenous public expenditures with a constant income tax rate. In this paper, we allow for productive or utility-generating government purchases in either of these specifications. It turns out that the previous indeterminacy results remain unchanged by the inclusion of useful government spending. By contrast, the earlier determinacy results are overturned when public expenditures generate sufficiently strong production or consumption externalities. Our analysis thus illustrates that a balanced-budget policy recommendation which limits the government's ability to change tax rates does not necessarily stabilize the economy against belief-driven business cycle fluctuations.
