TY  - JOUR
AU  - Turnovsky,Stephen J.
AU  - Sen,Partha
TI  - Fiscal Policy, Capital Accumulation, and Debt in an Open Economy
JF  - National Bureau of Economic Research Working Paper Series
VL  - No. 3489
PY  - 1991
Y2  - November 1991
UR  - http://www.nber.org/papers/w3489
L1  - http://www.nber.org/papers/w3489.pdf
N1  - Author contact info:
Stephen Turnovsky
Department of Economics
301 Savery Hall; Mail Stop DK 30
University of Washington
Seattle, WA   98195
Tel: 206-545-8028
E-Mail: sturn@u.washington.edu
AB  - This paper analyzes the effects of changes in government expenditures on both a domestically produced and an imported good in an open economy based on intertemporal optimizing behavior. The dynamic adjustment is characterized in detail and the critical role played by the accumulating capital stock is highlighted. The evolution of the current account is seen to mirror that of capital. The welfare of such policies is also assessed in tans of the intertemporal utility of the representative agent. Both permanent and temporary policy changes are considered, with the latter being shown to have a permanent effect on the economy.
ER  -