Optimal Government Spending in a Business Cycle Model

Steven Ambler () and Emanuela Cardia ()

No 44, Cahiers de recherche CREFE / CREFE Working Papers from CREFE, Université du Québec à Montréal

Abstract: We build a model of optimal time-consistent public spending in a dynamic general equilibrium model of the business cycle. We analyze the welfare properties of optimal public spending and characterize the optimal response of spending to exogenous economic shocks.

Nous analysons les dépenses publiques optimales et intertemporellement cohérentes dans le contexte d'un modèle dynamique d'équilibre général du cycle économique. Nous calculons les effets des dépenses optimales sur le bien-être social et nous caractérisons la réponse optimale des dépenses publiques aux chocs exogènes.

Keywords: business cycles; general equilibrium; optimal policy; governemnt spending (search for similar items in EconPapers)
JEL-codes: E32 E62 (search for similar items in EconPapers)
Date: 1996-09

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