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Monetary and Fiscal Dynamics

Monetary and Fiscal Dynamics

Paperback

Series: Studies in Contemporary Economics

EconomicsInvesting & FinanceGeneral Gardening

ISBN10: 3790806196
ISBN13: 9783790806199
Publisher: Physica-Verlag
Published: Jun 17 1992
Pages: 194
Weight: 0.73
Height: 0.43 Width: 6.69 Depth: 9.61
Language: English
The analysis will be conducted within an IS-LM model augmen- ted by the dynamics of money wages, private capital and public debt. A macroeconomic shock induces an extended process of adjustment that is characterized by unemployment. This in turn requires a dynamic path of monetary and fiscal policy: As a response to the shock, the central bank continuouslyadapts the quantity of money so as to keep up full employment all the time. And the government continuously accommodates its purchases of goods and services. Can this be sustained? Or will public debt tend to explode, thereby driving the stock of capial down to zero?

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Carlberg, Michael

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Economics