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dc.contributor.authorHeijdra, Ben J.en_US
dc.contributor.authorLigthart, Jenny E.en_US
dc.date.accessioned2006-09-06en_US
dc.date.accessioned2009-07-28T08:12:33Z-
dc.date.available2009-07-28T08:12:33Z-
dc.date.issued2006en_US
dc.identifier.urihttp://hdl.handle.net/10419/25822-
dc.description.abstractThe paper studies the dynamic macroeconomic effects of fiscal shocks of various duration (permanent and temporary) under different financing methods (lump-sum tax and government debt). To this end, we develop an intertemporal macroeconomic model for a small open economy, featuring monopolistic competition in the intermediate goods market, endogenous (intertemporal) labor supply, and finitely lived households. Endogenous labor supply is crucial in generating cyclical adjustment paths and yields faster convergence to the new steady state compared with exogenous labor supply. The quantitative output effects and transitional dynamics of fiscal policy differ substantially from those of an infinitely lived representative agent model. In addition, government debt is key in making the timing of shocks matter, thus yielding permanent output effects of temporary fiscal shocks.en_US
dc.language.isoengen_US
dc.publisherCESifo Münchenen_US
dc.relation.ispartofseriesCESifo working paper 1777en_US
dc.subject.jelE12en_US
dc.subject.jelE63en_US
dc.subject.jelL16en_US
dc.subject.ddc330en_US
dc.titleThe transitional dynamics of fiscal policy in small open economiesen_US
dc.typeWorking Paperen_US
dc.identifier.ppn517029723en_US
dc.rightshttp://www.econstor.eu/dspace/Nutzungsbedingungen-
Appears in Collections:CESifo Working Papers, CESifo Group Munich

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