COORDINATING MACROECONOMIC POLICY IN A SIMPLE AK GROWTH MODEL
Richard Barnett ()
No 299, Econometric Society 2004 Latin American Meetings from Econometric Society
Modern theories of government finance stress the importance of an economyâ€™s fiscal deficits in determining the course of monetary policy. Modern growth theory stresses the role of monetary factors in economic growth. This paper explores how these two are interrelated, using a simple AK growth model, one with money, reserve requirements, and government debt. We provide a comprehensive look at the coordination of macroeconomic policy and its effects on long-run growth under three alternative coordinating arrangements. We uncover some unconventional results regarding the relationship between growth and a number of policy variables; these rest squarely on the constraint of the coordination process
Keywords: Monetary and Fiscal Policy; AK growth model; inflation targeting; open market operations; reserve requirements (search for similar items in EconPapers)
JEL-codes: E5 E6 (search for similar items in EconPapers)
New Economics Papers: this item is included in nep-dge and nep-mac
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Journal Article: Coordinating macroeconomic policy in a simple AK growth model (2005)
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Persistent link: https://EconPapers.repec.org/RePEc:ecm:latm04:299
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