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

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  • Fujisaki, Seiya

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.

Suggested Citation

  • Fujisaki, Seiya, 2016. "Equilibrium Determinacy and Policy Rules : Role of Productive Money and Government Expenditure," MPRA Paper 69834, University Library of Munich, Germany.
    • Handle: RePEc:pra:mprapa:69834
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    References listed on IDEAS

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    13. T. Tamai, 2008. "Optimal fiscal policy in an endogenous growth model with public capital: a note," Journal of Economics, Springer, vol. 93(1), pages 81-93, February.
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    More about this item

    Keywords

    equilibrium determinacy; progressive income tax; Taylor rule; productive government expenditure and money;
    All these keywords.

    JEL classification:

    • E52 - Macroeconomics and Monetary Economics - - Monetary Policy, Central Banking, and the Supply of Money and Credit - - - Monetary Policy
    • E62 - Macroeconomics and Monetary Economics - - Macroeconomic Policy, Macroeconomic Aspects of Public Finance, and General Outlook - - - Fiscal Policy; Modern Monetary Theory

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