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Carlberg, M. (1990). Fiscal Policy. Cyclical Budget Balance versus Fatal Crowding Out. Duncker & Humblot. https://doi.org/10.3790/978-3-428-46942-0
Carlberg, Michael. Fiscal Policy: Cyclical Budget Balance versus Fatal Crowding Out. Duncker & Humblot, 1990. Book. https://doi.org/10.3790/978-3-428-46942-0
Carlberg, M (1990): Fiscal Policy: Cyclical Budget Balance versus Fatal Crowding Out, Duncker & Humblot, [online] https://doi.org/10.3790/978-3-428-46942-0

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Fiscal Policy

Cyclical Budget Balance versus Fatal Crowding Out

Carlberg, Michael

Volkswirtschaftliche Schriften, Vol. 401

(1990)

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Table of Contents

Section Title Page Action Price
Preface 5
Contents 7
1. Introduction 9
2. Short-Run Equilibrium 16
3. Long-Run Equilibrium 20
3.1. Long-Run Equilibrium 20
3.2. Process of Adjustment 25
3.3. Simulation 30
3.4. Public Consumption in Utility Function 41
4. Process of Adjustment 43
4.1. Short-Run Equilibrium 43
4.2. Medium-Run Equilibrium 48
4.3. Long-Run Equilibrium 48
4.4. Process of Adjustment 49
4.5. AD-AS Diagram 54
5. Investment Shock and Cyclical Adjustment 58
5.1. Economy Without Public Sector 58
5.1.1. Overlapping Generations Model 59
5.1.2. Multiplier-Accelerator Model 60
5.1.3. Simulation 62
5.2. Economy With Public Sector 66
5.2.1. Overlapping Generations Model 67
5.2.2. Multiplier-Accelerator Model 67
5.2.3. Simulation 69
5.3. Economy With Fiscal Policy 74
5.3.1. Overlapping Generations Model 74
5.3.2. Multiplier-Accelerator Model 75
5.3.3. Simulation 77
5.4. Alternative Paths 81
5.4.1. Stability 82
5.4.2. Damped Oscillations 82
5.4.3. Explosive Oscillations 86
6. Investment Shock, Public Interest and Cyclical Adjustment 92
6.1. Economy With Public Sector 92
6.1.1. Overlapping Generations Model 92
6.1.2. Multiplier-Accelerator Model 93
6.1.3. Simulation 96
6.2. Economy With Fiscal Policy 98
6.2.1. Overlapping Generations Model 100
6.2.2. Multiplier-Accelerator Model 100
6.2.3. Simulation 103
6.2.4. Restoring Stability 104
6.3. Stability 109
7. Extensions 117
7.1. The Concept of Full Employment 117
7.2. Investment Shock 120
7.2.1. Money Finance of Budget Deficit 120
7.2.2. Investment Subsidy 122
7.2.3. Monetary Policy 124
7.3. Monetary Shock 125
7.3.1. Process of Adjustment 126
7.3.2. Fiscal Policy 128
7.3.3. Monetary Policy 129
7.4. Growing Economy 130
7.4.1. Fiscal Policy 130
7.4.2. Optimum Fiscal Policy 137
8. Conclusion 142
9. Result 148
List of Symbols 150
References 152
Index 164