Equilibrium Determinacy and Policy Rules: Role of Productive Money and Government Expenditure

Seiya Fujisaki

MPRA Paper from University Library of Munich, Germany

Abstract: We analyze the relation between policy mixture and equilibrium determinacy in an economy where money and government expenditures are used for production. We find that an adequate mix of income tax and interest-rate control is important to realize a stable economy, as well as the relation between contribution of government expenditures to production and the basic tax rate as a source of the revenue for these expenditure.

Keywords: equilibrium determinacy; progressive income tax; Taylor rule; productive government expenditure and money (search for similar items in EconPapers)
JEL-codes: E52 E62 (search for similar items in EconPapers)
Date: 2016-03-03
New Economics Papers: this item is included in nep-mac and nep-mon
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Persistent link: https://EconPapers.repec.org/RePEc:pra:mprapa:69834

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