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Dynamics of macroeconomic adjestment with growth: some simulation results

journal contribution
posted on 30.05.2006, 09:56 authored by Sushanta K. Mallick
This paper examines the impact of several macroeconomic policies, both demand and supply management policies, on economic activity within a small macroeconomic simulation model. The model is based on a standard analytical framework that underlies adjustment policies in developing economies (DEs). The standard approach has been to use aggregate government expenditure as an instrument of fiscal policy to shock economic activity in a DE, with a negative dynamic response typically observed. In the context of such a small macroeconomic simulation model we decompose government expenditure into consumption and investment expenditure. Simulation exercises with and without model-consistent expectations throw up some contrasting results in the sense that fiscal policy can influence output positively through the effects of public sector investment on private investment in a DE such as India.

History

School

  • Business and Economics

Department

  • Economics

Pages

378351 bytes

Citation

MALLICK, S.K., 2001. Dynamics of macroeconomic adjestment with growth: some simulation results. International Economic Journal, 15(1), pp.115-139.

Publisher

© Taylor and Francis

Publication date

2001

Notes

This is Restricted Access. The article was published in the journal, International Economic Journal [© Taylor and Francis] and is available at: http://journalsonline.tandf.co.uk/openurl.asp?genre=journal&issn=1016-8737.

ISSN

1016-8737

Language

en

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Keywords

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