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.

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.

• Item Type: MPRA Paper
• Language: English
• Keywords: equilibrium determinacy, progressive income tax, Taylor rule, productive government expenditure and money
• Subjects: E - Macroeconomics and Monetary Economics > E5 - Monetary Policy, Central Banking, and the Supply of Money and Credit > E52 - Monetary Policy; E - Macroeconomics and Monetary Economics > E6 - Macroeconomic Policy, Macroeconomic Aspects of Public Finance, and General Outlook > E62 - Fiscal Policy

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