Rethinking Macroeconomic Policy within a Simple Dynamic Model

Almudí, Isabel (Universidad de Zaragoza) ; Fatás Villafranca, Francisco (Universidad de Zaragoza) ; Jarne, Gloria (Universidad de Zaragoza) ; Sánchez Chóliz, Julio (Universidad de Zaragoza)

Resumen: We propose a simple macro-dynamic model to rethink standard policy prescriptions. Our model includes exogenous growth, endogenous capital accumulation and debt, demand-driven production with a non-linear IS curve, a dynamic Phillips curve, and fiscal and monetary policy instruments. It has multiple steady states with different stability properties, and it is analytically tractable to a significant extent. We complete the analytical results with simulations. We find alternative growth patterns, endogenous fluctuations, and demand-driven level effects even in the long-run. For certain steady states the model shows saddle-path type instabilities, which lead us to reflect on fiscal and monetary policy standards.

Idioma: Inglés

DOI: 10.1111/meca.12133

Año: 2017

Publicado en: Metroeconomica 68, 3 (2017), 425-464
ISSN: 0026-1386

Factor impacto JCR: 1.379 (2017)

Categ. JCR: ECONOMICS rank: 133 / 353 = 0.377 (2017) - Q2 - T2

Factor impacto SCIMAGO: 0.65 - Economics and Econometrics (Q2)

Financiación: info:eu-repo/grantAgreement/ES/DGA/S10

Tipo y forma: Article (PostPrint)

Área (Departamento): Área Fund. Análisis Económico (Dpto. Análisis Económico)