The new open economy macroeconomics of government debt

• 成果类型: Article
• 署名作者: Ganelli, G
• 署名单位: International Monetary Fund
• 刊物名称: JOURNAL OF INTERNATIONAL ECONOMICS
• ISSN/ISSBN: 0022-1996
• DOI: 10.1016/j.jinteco.2004.03.001
• 发表日期: 2005
• 页码: 167-184
• 关键词: Fiscal policy; overlapping generations; New open economy macroeconomics; debt; Tax cut

摘要

In this paper we introduce an overlapping generations structure of the Blanchard (J. Polit. Econ. 93 (1985) 121) type in a New Open Economy Macroeconomics (NOEM) model. This allows us to study a wider range of fiscal shocks compared to the traditional Mundell-Fleming (MF) and to the baseline Redux models. We show that a debt-financed tax cut appreciates the short-tun exchange rate, but this result is reversed in the long run. A debt-financed increase of government spending, on the other hand, has ambiguous exchange rate effects. Our model also provides a bridge between the NOEM framework and the MF model. (C) 2004 Elsevier B.V. All rights reserved.