Balanced Budget Government Spending in a Small Open Regional Economy
Lecca, Patrizio and McGregor, Peter and Swales, Kim (2010) Balanced Budget Government Spending in a Small Open Regional Economy. Discussion paper. University of Strathclyde, Glasgow.
Preview |
Text.
Filename: Lecca_etal_2010_Balanced_budget_government_spending_in_a_small_open_regional_economy.pdf
Final Published Version Download (595kB)| Preview |
Abstract
This paper investigates the impact of a balanced budget fiscal policy expansion in a regional context within a numerical dynamic general equilibrium model. We take Scotland as an example where, recently, there has been extensive debate on greater fiscal autonomy. In response to a balanced budget fiscal expansion the model suggests that: an increase in current government purchase in goods and services has negative multiplier effects only if the elasticity of substitution between private and public consumption is high enough to move downward the marginal utility of private consumers; public capital expenditure crowds in consumption and investment even with a high level of congestion; but crowding out effects might arise in the short-run if agents are myopic.
ORCID iDs
Lecca, Patrizio, McGregor, Peter ORCID: https://orcid.org/0000-0003-1221-7963 and Swales, Kim;-
-
Item type: Monograph(Discussion paper) ID code: 67817 Dates: DateEvent2010PublishedNotes: Published as a paper within the Discussion Papers in Economics, No. 10-20 (2010) Subjects: Social Sciences > Economic Theory Department: Strathclyde Business School > Economics Depositing user: Pure Administrator Date deposited: 14 May 2019 12:51 Last modified: 04 Oct 2024 00:08 URI: https://strathprints.strath.ac.uk/id/eprint/67817