Current-account targeting and the equilibrium approach to fiscal policy

DC FieldValueLanguage
dc.contributor.authorBarry, Frank-
dc.description.abstractInternal and external balance are the twins goals of traditional Keynesian macroeconomic policy. New classical economists question whether either of these are related to welfare, since employment fluctuations may be Pareto-efficient, while the current-account balance is perceived as the outcome of saving and investment decisions by intertemporally-optimising agents. The present paper shows, however, that the current-account effects and welfare effects of various types of fiscal policy are directly related within the New Classical model, so that the response of the current account can be used to elicit information about the optimality or otherwise of government spending. The equilibrium approach therefore provides a microfoundation for "external balance" as an intermediate target for fiscal spending.en
dc.description.externalNotesA hard copy is available in UCD Library at GEN 330.08 IR/UNIen
dc.format.extent559030 bytes-
dc.publisherUniversity College Dublin. School of Economicsen
dc.relation.ispartofseriesUCD Centre for Economic Research Working Paper Seriesen
dc.subject.lcshFiscal policyen
dc.subject.lcshEquilibrium (Economics)en
dc.subject.lcshBalance of paymentsen
dc.titleCurrent-account targeting and the equilibrium approach to fiscal policyen
dc.typeWorking Paperen
dc.internal.availabilityFull text availableen
dc.statusNot peer revieweden
item.fulltextWith Fulltext-
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