Abstract
This paper analyzes the stochastic properties of a dynamic general equilibrium model under two government policies which might be interpreted as ‘countercyclical’ fiscal policies. In one case, we examine the effects on fluctuations of government spending on infrastructure investment in an economy in which public capital is an input to the aggregate production function. In the other, we examine the effects on aggregate business cycle fluctuations of a proportional tax on lay-offs. Our results find only weak evidence for the stabilizing effects of either policy.
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© 1997 Springer Science+Business Media Dordrecht
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Dolmas, J., Huffman, G.W. (1997). An Exploration Into the Effects of Dynamic Economic Stabilization. In: Hairault, JO., Hénin, PY., Portier, F. (eds) Business Cycles and Macroeconomic Stability. Springer, Boston, MA. https://doi.org/10.1007/978-1-4615-6173-6_1
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DOI: https://doi.org/10.1007/978-1-4615-6173-6_1
Publisher Name: Springer, Boston, MA
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Online ISBN: 978-1-4615-6173-6
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