Optimal fiscal policy, uncertainty, and growth

Clemens, Christiane; Soretz, Susanne

doi:10.1016/j.jmacro.2003.05.003

Cited by 11 publications

(6 citation statements)

References 25 publications

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“…Versions of his formulation of the production process, which we will call "differential" in what follows, were used by many authors in several fields. Recent examples include Asea and Turnovsky (1998), Bianconi and Turnovsky (2005), Chatterjee, Giuliano and Turnovsky (2004), Chattopadhyay and Turnovsky (2003), Clemens and Soretz (2004), Corsetti (1997), Epaulart and Pommeret (2003), Evans and Kenc (2003), García-Peñalosa and , Gokan (2002), Gong andZou (2002, 2003), Grinols and Turnovsky (1993, 1994, 1998a, and 1998b), Kenc (2004), Pommeret and Smith (2005), Smith (1996), Steger (2005), Turnovsky (1993Turnovsky ( , 1999aTurnovsky ( , 1999b, and 2000), Turnovsky and Smith (2006) and Koethenbuerger and Lockwood (2009).…”

Section: Introductionmentioning

confidence: 99%

Production technologies in stochastic continuous time models

Wälde

2011

Journal of Economic Dynamics and Control

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Standard-Nutzungsbedingungen:Die Dokumente auf EconStor dürfen zu eigenen wissenschaftlichen Zwecken und zum Privatgebrauch gespeichert und kopiert werden.Sie dürfen die Dokumente nicht für öffentliche oder kommerzielle Zwecke vervielfältigen, öffentlich ausstellen, öffentlich zugänglich machen, vertreiben oder anderweitig nutzen.Sofern die Verfasser die Dokumente unter Open-Content-Lizenzen (insbesondere CC-Lizenzen) zur Verfügung gestellt haben sollten, gelten abweichend von diesen Nutzungsbedingungen die in der dort genannten Lizenz gewährten Nutzungsrechte. Properties of dynamic stochastic general equilibrium models can be revealed by either using numerical solutions or qualitative analysis. Very precise and intuition-building results are obtained by working with models which provide closed-form solutions. Closed-form solutions are known for a large class of models some of which, however, have some undesirable features. This paper offers closed-form solutions for models which are just as tractable but do not suffer from these shortcomings. Terms of use: Documents in EconStor mayJEL Code: E20, O40.

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Section: Introductionmentioning

confidence: 99%

Production technologies in stochastic continuous time models

Wälde

2011

Journal of Economic Dynamics and Control

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“…This effect of saving too much out of precautionary motives may even lead to a situation characterized by suboptimally high growth, where the expected growth rate of the market economy exceeds the Pareto‐efficient one (cf. Clemens and Soretz, 1997, 2004; Smith, 1996).…”

Section: Stochastic Growth With Elastic Labor Supplymentioning

confidence: 99%

“…The first to examine the effects of labor income risk in continuous‐time stochastic growth models with exogenous labor supply were Clemens (2004), Clemens and Soretz (1997, 2004) and Garcia Peñalosa and Turnovsky (2005). Whereas the literature on growth and endogenous labor supply in deterministic settings is abundant (cf.…”

Section: Introductionmentioning

confidence: 99%

Stochastic Growth and Factor Income Risk

Clemens

2009

German Economic Review

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This paper examines the effects of aggregate factor income risk in a tractable version of the stochastic Romer endogenous growth model. Labor supply is endogenous. The presence of labor income risk unambiguously increases savings and growth due to precautionary motives. Households not only underaccumulate but also work less along the balanced growth path of the competitive economy when compared with the Pareto-efficient allocation. The paper also discusses distributive disturbances for the case of inelastic labor supply. Here, growth effects are negative for empirically plausible correlations of the underlying shocks. Copyright 2009 The Author. Journal Compilation Verein für Socialpolitik and Blackwell Publishing Ltd.

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“…From (12), (15) and (25), balancing the stochastic component of the government budget ensures that the stochastic shocks to the economic growth rate of the representative agent optimization replicate those of the central planner optimization, i.e., dµ = dμ for equal portfolio shares n K =n K and n F =n F . In terms of government budget balancing condition (13), the mean economic growth rate of the representative agent optimization equaling to that of the central planner optimization is equivalent to the equality of the two consumption-wealth ratios.…”

Section: Optimal Tax Policymentioning

confidence: 99%

Productive Government Expenditure in a Stochastically Growing Open Economy

Wang

2007

Jrl Syst Sci & Complex

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This paper employs a stochastic endogenous growth model with productive government expenditure in a small open economy to analyze the optimal fiscal policy. First, a stochastic model of a small open economy is constructed. Second, the equilibrium solutions of the representative agent's stochastic optimization problem are derived. Third, we obtain the equilibrium solutions of the central planner's stochastic optimization problem and the optimal government expenditure policy. Finally, the optimal tax policy is characterized.

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Optimal fiscal policy, uncertainty, and growth

Cited by 11 publications

References 25 publications

Production technologies in stochastic continuous time models

Production technologies in stochastic continuous time models

Stochastic Growth and Factor Income Risk

Productive Government Expenditure in a Stochastically Growing Open Economy

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