Demand elasticity and fiscal policy - 2002

Alessandra Chirco , Caterina Colombo Full Version (PDF)
(Quaderni del Dipartimento di Scienze Economiche e Matematico-Statistiche dell'Università del Salento - Collana di Economia, 10/03 / 2002)
In this paper we study the transmission mechanism of fiscal policy based on possible changes in the elasticity of demand. These are obtained by assuming that firms face a balance of public and private demands, each characterized by different price elasticity. We show that in this set-up there exists a range of the technological conditions under which fiscal policy is expansionary, independently of the pro or counter-cyclical nature of its impact on the desired mark-up.

Table of Contents


Introduction     PDF
Alessandra Chirco , Caterina Colombo 2-2

The basic set-up     PDF
Alessandra Chirco , Caterina Colombo 3-7

The elasticity transmission mechanism and the properties of technology     PDF
Alessandra Chirco , Caterina Colombo 7-11

Extensions     PDF
Alessandra Chirco , Caterina Colombo 11-13

Conclusions     PDF
Alessandra Chirco , Caterina Colombo 13-14

Bibliography     PDF
15-18

Appendix     PDF
19-20


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