| Autor: |
Abad, Nicolas, Seegmuller, Thomas, Venditti, Alain |
| Přispěvatelé: |
Aix-Marseille Sciences Economiques (AMSE), École des hautes études en sciences sociales (EHESS)-Aix Marseille Université (AMU)-École Centrale de Marseille (ECM)-Centre National de la Recherche Scientifique (CNRS), EDHEC Business School (EDHEC), Lai Tong, Charles |
| Jazyk: |
angličtina |
| Rok vydání: |
2014 |
| Předmět: |
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| Popis: |
We investigate the role of non-separable preferences on the occurrence of macroeconomic instability under a balanced-budget rule where government spending is financed by a tax on labor income. Considering a one-sector neoclassical growth model with a large class of non-separable utility functions, we find that expectations-driven fluctuations easily occur when consumption and labor are Edgeworth substitutes or weak Edgeworth complements. Under these properties, an intermediate range of tax rates and a sufficiently low elasticity of intertemporal substitution in consumption lead to instability. |
| Databáze: |
OpenAIRE |
| Externí odkaz: |
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