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Please use this identifier to cite or link to this item: https://dspace.lboro.ac.uk/2134/2469

Title: On stabilisation policy: are there conflicting implications for growth and welfare?
Authors: Varvarigos, Dimitrios
Keywords: Growth
Business cycles
Stabilisation policy
Issue Date: 2006
Abstract: The paper examines the choices for fiscal stabilisation policy that maximise aggregate welfare and long-run growth. This is done in the context of a stochastic dynamic general equilibrium model where premeditated learning provides the engine of human capital accumulation and growth, and technology shocks provide the impulse source of fluctuations. Contrary to existing conventional wisdom, the results indicate a conflict between the two policy objectives: the choice of no stabilisation, associated with maximum growth, is also associated with minimum welfare. Welfare maximisation requires a full stabilisation response to the occurrence of business cycles.
Description: This is a working paper.
URI: https://dspace.lboro.ac.uk/2134/2469
Appears in Collections:Working Papers (Economics)

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