Fiscal Policies in a Stochastic Model with Hyperbolic Discounting

Liutang Gong and Heng-Fu Zou ()

No 103, CEMA Working Papers from China Economics and Management Academy, Central University of Finance and Economics

Abstract: In this paper, we study the effects of fiscal policies on economy in a stochastic model with hyperbolic discounting rate. With specific assumptions on the production technology, preferences, and stochastic shocks, we derive the explicit solutions to the growth rates of consumption and savings and equilibrium returns on all assets, and give the effects of fiscal policies and discounting rate on growth.

Keywords: Fiscal policies; Hyperbolic discounting; Stochastic growth (search for similar items in EconPapers)
JEL-codes: D91 G11 H0 O0 (search for similar items in EconPapers)
Pages: 23 pages
Date: 1998
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Citations: View citations in EconPapers (2)

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Persistent link: https://EconPapers.repec.org/RePEc:cuf:wpaper:103

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