A Monetary Model of Exchange Rate and Balance of Payments Adjustment

Diego Nocetti

Economic Issues Journal Articles, 2006, vol. 11, issue 1, 25-36

Abstract: In this note I explore how a non-constant rate of time preference on the part of policymakers affects economic growth. In a simple dynamic general equilibrium model I show that if the incumbent government has a rate of time preference in the form of a quasi-hyperbolic discounting function, tax rates can be substantially higher and economic growth considerably lower than the standard case of exponential discounting.

Date: 2006
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Persistent link: https://EconPapers.repec.org/RePEc:eis:articl:106nocetti

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