Please use this identifier to cite or link to this item: http://hdl.handle.net/10419/90792
Authors: 
Andersen, T. M.
Holden, S.
Year of Publication: 
1998
Series/Report no.: 
Memorandum, Department of Economics, University of Oslo 12/1998
Abstract: 
Do business cycle fluctuations leave a role and a welfare case for an active stabilization policy by means of fiscal policy instruments? We address this issue in a two-sector open economy model with price-taking firms and imperfect competition in the labour market. Fiscal policies are shown to affect the equilibrium distribution of prices and hence output in the case of both supply (productivity) and demand (preferences) shocks.
Subjects: 
business cycles
fiscal policy
demand
supply
JEL: 
E32
E63
F41
Document Type: 
Working Paper

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