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| LEADER |
01516nam a2200277Ia 4500 |
| 001 |
10.1111-jmcb.12572 |
| 008 |
220706s2018 CNT 000 0 und d |
| 020 |
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|a 00222879 (ISSN)
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| 245 |
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|a Balanced-Budget Rules and Aggregate Instability: The Role of Endogenous Capital Utilization
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| 260 |
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|b Blackwell Publishing Inc.
|c 2018
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| 856 |
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|z View Fulltext in Publisher
|u https://doi.org/10.1111/jmcb.12572
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| 520 |
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|a It has long been demonstrated that in a closed economy a balanced-budget fiscal policy can induce aggregate instability unrelated to economic fundamentals. The empirical relevance of this result has been challenged by many studies. In this paper, we show that such extrinsic instability associated with a balanced-budget rule is a robust phenomenon in a similar closed-economy setting enhanced with endogenous capital utilization. This suggests that the design or operation of a balanced-budget fiscal policy should recognize that it may constitute a potential source of self-fulfilling prophecies and belief-driven fluctuations. © 2018 The Ohio State University
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| 650 |
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|a balanced-budget rules
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|a capital utilization
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| 650 |
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|a consumption taxes
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|a E32
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|a E62
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| 650 |
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|a income taxes
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| 650 |
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|a indeterminacy
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| 650 |
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|a public debt
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| 650 |
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|a self-fulfilling expectations
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|a sunspots
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|a Huang, K.X.
|e author
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|a Meng, Q.
|e author
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|a Xue, J.
|e author
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| 773 |
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|t Journal of Money, Credit and Banking
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