Balanced-Budget Rules and Aggregate Instability: The Role of Endogenous Capital Utilization
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 wi...
| Main Authors: | , , |
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| Format: | Article |
| Language: | English |
| Published: |
Blackwell Publishing Inc.
2018
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| Subjects: | |
| Online Access: | View Fulltext in Publisher |