Intertemporal Budget Policies and Macroeconomic Adjustment in a Small Open Economy

Walter Fisher and Marcelo Bianconi

No 96, Economics Series from Institute for Advanced Studies

Abstract: This paper analyzes the role of nominal assets in ranking intertemporal budget policies in a growing open economy. The budget policies are ranked in terms of the public's intertemporal stock of tax liabilities. Our main result is that, in a small open economy, the valuation of private and public assets is in terms of the exogenous foreign price level under purchasing power parity. This constraint limits the scope of government to influence the real value of assets using fiscal and monetary policy shocks.

Keywords: Government budget; Taxation; Nominal asstes; Current account (search for similar items in EconPapers)
JEL-codes: E5 E6 F4 (search for similar items in EconPapers)
Pages: 31 pages
Date: 2001-02
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Citations: View citations in EconPapers (1)

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https://irihs.ihs.ac.at/id/eprint/2066 First version, 2001 (application/pdf)

Related works:
Journal Article: Intertemporal budget policies and macroeconomic adjustment in a small open economy (2005)
Working Paper: Intertemporal Budget Policies and Macroeconomic Adjustment in a Small Open Economy (2003)
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