PL EN


Preferencje help
Widoczny [Schowaj] Abstrakt
Liczba wyników
2013 | 7 | nr 3 | 5--16
Tytuł artykułu

Fiscal Policy within a Common Currency Area - Growth Implications in the Light of Neoclassical Theory

Treść / Zawartość
Warianty tytułu
Języki publikacji
EN
Abstrakty
EN
We examine the long-run impact of fiscal policy on economic growth under the conditions of an economic and monetary union (EMU). The analysis is based on the neoclassical growth model of a small (in economic terms) open economy in an EMU. The core assumptions are perfect capital mobility, which results in identical interest rates across the EMU, and perfect mobility of goods, which leads to the convergence of price levels. The model is based on standard neoclassical assumptions, i.e., the output is determined by the Cobb-Douglas production function with a Harrodneutral technical progress and constant returns to scale, capital and labor receive their marginal products, etc. We show that a unique long-run equilibrium exists and is characterized by the socalled natural rate of growth. The necessary and sufficient conditions of global asymptotic stability form a system of three non-trivial inequalities. We argue that in modern economies, these conditions are satisfied, except perhaps for very short periods of time. Furthermore, we show that the golden rules of fiscal policy have the form of an alternative optimal policy that crucially depends on the relation between the real interest rate and the natural rate of growth and on the relations between five other autonomous parameters. (original abstract)
Rocznik
Tom
7
Numer
Strony
5--16
Opis fizyczny
Twórcy
  • Poznań University of Economics, Poland
Bibliografia
  • Acemoglu, D. (2008). Introduction to Modern Economic Growth. Princeton, NY: Princeton University Press.
  • Balistreri, E. J., McDaniel, C. A., & Wong, E. V. (2003). An Estimation of U.S. Industry-Level Capital- Labor Substitution Elasticities: support for Cobb- Douglas. North American Journal of Economics and Finance, 14 (3), 343-356.
  • Barro, R. J. (1990). Government spending in a simple model of economic growth. Journal of Political Economy, 98 (5), 103-125.
  • Carlberg, M. (1997). International Economic Growth, Heidelberg, Physica-Verlag.
  • Corsetti, G., & Roubini, N. (1996). Optimal government spending and taxation in endogenous growth models (Working Papers No. 5851). National Bureau of Economic Research.
  • Dornbusch, R. (1980). Open Economy Macroeconomics. New York, NY: Basic Books Inc.
  • European Central Bank. (2005). Monetary policy and inflation differentials in a heterogeneous currency area. ECB Monthly Bulletin, 5, 61-78.
  • Fisher, W. H. (2010). Relative Wealth, Growth, and Transitional Dynamics: The Small Open Economy Case. Macroeconomic Dynamics, 14, 224-42.
  • Futagami, K., Morita, Y., & Shibate, A. (1993). Dynamic Analysis of an Endogenous Growth Model with Public Capital. Scandinavian Journal of Economics, 95 (4), 607-625.
  • Gandolfo, G. (1980). Economic Dynamics: Methods and Models (2nd ed.). Amsterdam: North-Holland.
  • Ghosh, S., & Roy, U. (2004). Fiscal Policy, Long-Run Growth, and Welfare in a Stock-Flow Model of Public Goods. Canadian Journal of Economics, 37 (3), 742-756.
  • Greiner, A., & Fincke, B. (2009). Public Debt and Economic Growth. Berlin: Springer.
  • Greiner, A., & Semmler, W. (2000). Endogenous Growth, Government Debt and Budgetary Regimes. Journal of Macroeconomics, 22 (3), 363-384.
  • Groneck, M. (2010). A Golden Rule of Public Finance or a Fixed Deficit Regime? Growth and Welfare Effects of Budget Rules. Economic Modeling, 27 (2), 523-534.
  • Irmen, A., & Kuehnel, J. (2009). Productive Government Expenditure And Economic Growth. Journal of Economic Surveys, 23 (4), 692-733.
  • Kahanec, M. (2012). Labor Mobility in an Enlarged European Union (Discussion Paper No. 6485). The Institute for the Study of Labor.
  • Konishi, Y., & Nishiyama, Y. (2002). Nonparametric Test for Translog Specification of Production Function in Japanese Manufacturing Industry. In iEMSR 2002 Conference Proceedings (pp. 597- 602). Manno: International Environmental Modelling and Software Society.
  • Konopczyński, M. (2004). Model wzrostu małej gospodarki w unii monetarnej. Ujęcie neoklasyczne [The growth model of a small economy in a monetary union. Neoclassical approach]. In E. Panek (Ed.), Matematyka w ekonomii [Mathematics in Economics]. Zeszyty Naukowe, 41 (pp. 7-42). Poznań: University of Economics.
  • Meardi, G. (2012). Union Immobility? Trade Unions and the Freedoms of Movement in the Enlarged EU. British Journal of Industrial Relations, 50 (1), 99-120.
  • Minea, A., & Villieu, P. (2009). Borrowing to finance public investment? The "golden rule of public finance" Reconsidered in an Endogenous Growth Setting. Fiscal Studies, 30 (1), 103-133.
  • Sosvilla-Rivero, S., Gil-Pareja, S. (2004). Price Convergence in the European Union. Applied Economics Letters, 11 (1), 39-47.
  • Sosvilla-Rivero, S., Gil-Pareja, S. (2012). Convergence in car prices among European countries. Applied Economics, 44 (25), 3247-3254.
  • Tobin, J. (1965). Money and Economic Growth. Econometrica, 33 (4), 671-684.
  • Turnovsky, S. J. (2009). Capital Accumulation and Economic Growth in a Small Open Economy. Cambridge, UK: Cambridge University Press.
  • Willman, A. (2002). Euro Area Production Function and Potential Output: A Supply Side System Approach (Working Papers No. 153). European Cen¬tral Bank.
  • Wolszczak-Derlacz, J., (2010). Does One Currency Mean One Price? Eastern European Economics, 48 (2), 87-114.
  • Zimmermann, K. F. (2009). Labor Mobility and the Integration of European Labor Markets (Discussion Paper No. 862). German Institute for Economic Research.
Typ dokumentu
Bibliografia
Identyfikatory
Identyfikator YADDA
bwmeta1.element.ekon-element-000171257941

Zgłoszenie zostało wysłane

Zgłoszenie zostało wysłane

Musisz być zalogowany aby pisać komentarze.
JavaScript jest wyłączony w Twojej przeglądarce internetowej. Włącz go, a następnie odśwież stronę, aby móc w pełni z niej korzystać.