- Tytuł:
- How Budget Deficit Impairs Long-Term Growth and Welfare under Perfect Capital Mobility
- Autorzy:
- Konopczyński, Michał
- Powiązania:
- https://bibliotekanauki.pl/articles/2076617.pdf
- Data publikacji:
- 2014
- Wydawca:
- Polska Akademia Nauk. Czytelnia Czasopism PAN
- Tematy:
-
budget deficit
optimal fiscal policy
perfect capital mobility - Opis:
- This paper investigates the implications of the size of budget deficit in the open economy under perfect mobility of capital. For that purpose we construct a general equilibrium model with consumers maximizing the discounted utility of consumption, and firms maximizing profits. Government sets the size of the deficit relative to GDP and controls the structure of public debt. Using standard methods of optimal control theory we solve the model, i.e. we find explicit formulas for all trajectories and the level of welfare. Finally, we show that the higher the deficit-to-GDP ratio, the lower the welfare of consumers. Similarly, welfare increases with the share of foreign creditors in public debt.
- Źródło:
-
Central European Journal of Economic Modelling and Econometrics; 2014, 3; 129-152
2080-0886
2080-119X - Pojawia się w:
- Central European Journal of Economic Modelling and Econometrics
- Dostawca treści:
- Biblioteka Nauki
Artykuł