| 来源类型 | Discussion paper
|
| 规范类型 | 论文
|
| 来源ID | DP3426
|
| DP3426 How do European Monetary and Fiscal Authorities Behave? |
| Carlo A. Favero
|
| 发表日期 | 2002-06-20
|
| 出版年 | 2002
|
| 语种 | 英语
|
| 摘要 | This Paper studies the role of asset-market completeness for the properties of optimal policy. A suitable framework for this purpose is the small open economy with complete international asset markets. For in this environment changes in policy represent country-specific risk diversifiable in world markets. Our main finding is that the fundamental public finance principle whereby when taxes on all final goods are available, it is optimal to tax final goods uniformly fails to obtain. In general, uniform taxation is optimal because it amounts to a non-distorting tax on fixed factors of production. In the open economy this principle fails because when households can insure against the risk of a policy reform, initial private asset holdings are contingent on actual policy and thus no longer represent an inelastically supplied source of income. Two further differences between optimal policy in the closed and open economies with complete markets are: (a) In the open economy, optimal consumption and income tax rates are unchanged in response to government purchases shocks. By contrast, in the closed economy tax rates do respond to innovations in public spending. (b) In the open economy, the Friedman rule is optimal only if the Ramsey planner has access to consumption taxes. In the absence of consumption taxes, deviations from the Friedman rule are large. On the other hand, in the closed economy, the availability of either consumption or income taxes suffices to render the Friedman rule optimal. |
| 主题 | International Macroeconomics
|
| 关键词 | Optimal monetary and fiscal policy
Open economies
Anticipated ramsey policy
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| URL | https://cepr.org/publications/dp3426
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| 来源智库 | Centre for Economic Policy Research (United Kingdom)
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| 资源类型 | 智库出版物
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| 条目标识符 | http://119.78.100.153/handle/2XGU8XDN/532445
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推荐引用方式
GB/T 7714 |
Carlo A. Favero. DP3426 How do European Monetary and Fiscal Authorities Behave?. 2002.
|
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