Munich Personal RePEc Archive

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

Fujisaki, Seiya (2016): Equilibrium Determinacy and Policy Rules : Role of Productive Money and Government Expenditure.

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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.

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