The New Open Economy Macroeconomics of Government Debt

Giovanni Ganelli

Economic Papers from Trinity College Dublin, Economics Department

Abstract: In this paper we introduce an overlapping generations structure of the Blanchard type in a New Open Economy macroeconomics model. This allows us to study a wider range of fiscal shocks compared to the traditional Mundell-Fleming and to the baseline Redux models. One important policy implication of our model is that the tax cut implemented in the US in 2001 might have contributed to the appreciation of hte Dollar vis-a-vis the Euro. In contrast, the imposition of fiscal constraint such as the "Golden Rule" proposed by the UK government can have opposite exchange rate effects.

Date: 2002
New Economics Papers: this item is included in nep-dge, nep-ifn and nep-mac
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Citations: View citations in EconPapers (6)

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Related works:
Journal Article: The new open economy macroeconomics of government debt (2005)
Working Paper: The New Open Economy Macroeconomics of Government Debt (2003)
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Persistent link: https://EconPapers.repec.org/RePEc:tcd:tcduee:200214

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