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A New-Open-Economy Macro Model for Fiscal Policy Evaluation, Dirk Muir, Douglas Laxton, Dennis Botman, Andrei Romanov

Creator
Abstract
We develop a New-Open-Economy-Macro model in which Ricardian equivalence does not hold because of (i) distortionary labor and corporate income taxation; (ii) limited asset market participation; and (iii) because the overlapping-generations structure results in a disconnect between current and future generations. We consider a permanent increase in government debt following a cut in labor or corporate income taxes in a small and large open economy. We analyze the sensitivity of the results to the key structural parameters of the model and argue that under plausible assumptions there will be significant crowding-out effects associated with permanent increases in government debt
Table Of Contents
""Contents""; ""I. Introduction""; ""II. The Model""; ""III. The Effects of Tax Cuts in a Small and Large Open Economy""; ""IV. Sensitivity Analysis""; ""V. Conclusion""; ""References""
Language
eng
Literary Form
non fiction
Note
"February 2006."
Physical Description
1 online resource (46 p.)
Specific Material Designation
remote
Form Of Item
online
Isbn
9781451908411

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