Resource title

Capital Mobility and the Effectiveness of Fiscal Policy in Open Economies

Resource image

image for OpenScout resource :: Capital Mobility and the Effectiveness of Fiscal Policy in Open Economies

Resource description

This paper uses a dynamic general equilibrium two-country optimizing ?new-open economy macroeconomics? model to analyze the consequences of international capital mobility for the effectiveness of fiscal policy. Conventional wisdom suggests that higher capital mobility diminishes the effectiveness of fiscal policy. The model laid out in this paper provides an example that a higher degree of capital mobility can also increase the effectiveness of fiscal policy. This tends to be the case if the stance of monetary policy can be described by means of a simple monetary policy rule.

Resource author

Christian Pierdzioch

Resource publisher

Resource publish date

Resource language

eng

Resource content type

text/html

Resource resource URL

http://hdl.handle.net/10419/17911

Resource license

Adapt according to the presented license agreement and reference the original author.