Government Policy in a Stochastic Growth Model with Elastic Labor Supply

Stephen J Turnovsky

Journal of Public Economic Theory, 2000, vol. 2, issue 4, 389-433

Abstract: Endogenous labor supply is introduced into a stochastic growth model. Money is superneutral, and the real part of the equilibrium can be characterized by two nonlinear trade‐off loci between the time devoted to leisure and the mean growth rate that ensure the following: (i) equality among the risk‐adjusted rates of return and (ii) equilibrium in the output market. The balanced growth equilibrium is characterized analytically and policy implications derived. Extensive numerical simulations are also conducted. These assess the effects of risk on growth and the impact of fiscal policy on both the mean growth rate and its volatility. Implications for optimal monetary policy are also addressed.

Date: 2000
References: Add references at CitEc
Citations: View citations in EconPapers (43)

Downloads: (external link)
https://doi.org/10.1111/1097-3923.00044

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:bla:jpbect:v:2:y:2000:i:4:p:389-433

Ordering information: This journal article can be ordered from
http://www.blackwell ... bs.asp?ref=1097-3923

Access Statistics for this article

Journal of Public Economic Theory is currently edited by Rabah Amir, Gareth Myles and Myrna Wooders

More articles in Journal of Public Economic Theory from Association for Public Economic Theory Contact information at EDIRC.
Bibliographic data for series maintained by Wiley Content Delivery ().