Fiscal policy in an emerging market business cycle model
| Autor: | Chetan Ghate, Pawan Gopalakrishnan, Suchismita Tarafdar |
|---|---|
| Rok vydání: | 2016 |
| Předmět: |
Macroeconomics
Emerging Market Business Cycles Fiscal Policy in a Small Open Economy Indian Business Cycle Interest Rate Shocks Macroeconomic Stabilization 05 social sciences jel:E32 jel:F32 Monetary economics Current account jel:F41 Key features Fiscal policy jel:H2 0502 economics and business Business cycle Economics 050207 economics Real interest rate Volatility (finance) Emerging markets General Economics Econometrics and Finance 050205 econometrics |
| Zdroj: | The Journal of Economic Asymmetries. 14:52-77 |
| ISSN: | 1703-4949 |
| Popis: | Emerging market economy business cycles are typically characterized by high consumption and output volatility, strongly counter-cyclical current accounts, and counter-cyclical real interest rates. Evidence from the wider EME and less developed economy business cycle experience suggests however that real interest rates can also be pro-cyclical. We reconcile the pro-cyclicality of real interest rates with the above facts by embedding fiscal policy into a standard emerging market business cycle model. We show that fiscal policy makes real interest rates a-cyclical or pro-cyclical. We use the model to replicate qualitatively some of the key features of the Indian business cycle. |
| Databáze: | OpenAIRE |
| Externí odkaz: |
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