Temporary and permanent government spending in a small open economy

Article Abstract:

The effects of temporary and permanent fiscal policies were analyzed within an equilibrium model of a small open economy. The model takes into account the supply-side responses of capital and labor to changes in government spending and in which the intertemporal optimizing behavior of agents endogenously influences both investment and employment. It was found that the dynamic interaction between labor and capital plays a significant role for the consequences of government spending. Moreover, permanent increases in government expenditures have larger positive labor supply and output effects than temporary fiscal policies.

Expenditures-Total Govt, Expenditures, Public, Public expenditures, Labor market, Capital

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Money, politics and the post-war business cycle

Article Abstract:

The political effects of monetary policy on the macroeconomy were investigated using a generalized standard vector autoregression model. No strong evidence was found to support the assumption that political factors belong in empirical models of monetary policy and only weak evidence that political effects are significant at all. These findings contradict earlier results in the political econometric literature that use small macroeconomic information sets and do not take into account the endogenous nature of political variables.

Other General Government Support, Coinage & Currency, Politics NEC, Economic aspects, Political aspects, Money, Politics

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The role of intratemporal adjustment costs in a multisector economy

Article Abstract:

The procyclical behavior of cross-sector measures of output, capital and employment is examined using a multisector business cycle model. It is shown that the introduction of intratemporal adjustment costs for investment can substantially improve the performance of the model. Such costs make it hard to change the nature of production of new capital goods since they eliminate many counterfactual observations of the model. The effects of introducing intratemporal adjustment costs for labor are analyzed.

Equilibrium (Economics), Economic stabilization, Cost (Economics), Costs (Economics)

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