An Exploration of Optimal Stabilization Policy
View/ Open
Author
Eggertsson, Gauti B.
Blanchard, Olivier
Note: Order does not necessarily reflect citation order of authors.
Published Version
http://www.brookings.edu/about/projects/bpea/papers/2011/optimal-stabilization-policy-mankiwhttp://www.jstor.org/stable/41228526
Metadata
Show full item recordCitation
N. Gregory Mankiw and Matthew Weinzierl. An exploration of optimal stabilization policy. Brookings Papers on Economics Activity Spring 2011: 209-272.Abstract
This paper examines the optimal response of monetary and fiscal policy to a decline in aggregate demand. The theoretical framework is a two-period general equilibrium model in which prices are sticky in the short run and flexible in the long run. Policy is evaluated by how well it raises the welfare of the representative household. Although the model has Keynesian features, its policy prescriptions differ significantly from those of textbook Keynesian analysis. Moreover, the model suggests that the commonly used “bang for the buck” calculations are potentially misleading guides for the welfare effects of alternative fiscal policies.Terms of Use
This article is made available under the terms and conditions applicable to Other Posted Material, as set forth at http://nrs.harvard.edu/urn-3:HUL.InstRepos:dash.current.terms-of-use#LAACitable link to this page
http://nrs.harvard.edu/urn-3:HUL.InstRepos:11177699
Collections
- FAS Scholarly Articles [18256]
Contact administrator regarding this item (to report mistakes or request changes)
Comments made during the workflow steps
Per Sherpa Romeo, can post publisher's version LAA http://www.sherpa.ac.uk/romeo/issn/0007-2303/ . In QSDB.