208-2011-L5

208-2011-L5 - Econ208 MarekKapicka Lecture5...

Info iconThis preview shows pages 1–7. Sign up to view the full content.

View Full Document Right Arrow Icon
Econ 208 Marek Kapicka Lecture 5 The Effects of Government Spending
Background image of page 1

Info iconThis preview has intentionally blurred sections. Sign up to view the full version.

View Full DocumentRight Arrow Icon
What To Do n Read: DLS, Chapter 12
Background image of page 2
Where are we? n Introduction: A model with no Government n The Effects of Government Spending n Government Taxation and Government Debt n Fiscal and Monetary Policy n Optimal Monetary Policy n Financial Intermediation n Current Account Determination n Fiscal Deficits and Current Account
Background image of page 3

Info iconThis preview has intentionally blurred sections. Sign up to view the full version.

View Full DocumentRight Arrow Icon
Roadmap n Government Expenditures n A) Data on Gov’t Expenditures n B) Permanent Changes in Gov’t Spending n C) Temporary Changes in Gov’t Spending n D) Social Security
Background image of page 4
B1) Permanent increase in Gov’t spending   Steady State n Output, Consumption and Investment n Steady State Output  increases  in gov’t  spending n Consumption  decreases  in gov’t spending  ( crowding out ) n Change in interest rate? ss t ss ss ss ss ss K I G K K C G K Y δ φ α = - - - = + = ) 1 (
Background image of page 5

Info iconThis preview has intentionally blurred sections. Sign up to view the full version.

View Full DocumentRight Arrow Icon
B1) Permanent increase in Gov’t spending   Extension: Labor Supply n Assume that the utility depends on labor  supply n Production function given by  η + - = + 1 ln ) , ( 1 L C L C U α - = 1 ) , ( L K L K F
Background image of page 6
Image of page 7
This is the end of the preview. Sign up to access the rest of the document.

Page1 / 28

208-2011-L5 - Econ208 MarekKapicka Lecture5...

This preview shows document pages 1 - 7. Sign up to view the full document.

View Full Document Right Arrow Icon
Ask a homework question - tutors are online