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FISCAL POLICY IN A DYNAMIC OPEN-ECONOMY NEW-KEYNESIAN MODEL. (1995). Sen, Partha.
In: Working papers.
RePEc:cde:cdewps:30.

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  1. 2. This is strictly not true because one of the primary focus of new-Keynesian macroe [ conomics has been on wage and price staggering. The statement in the text refers to issues of capital accumulation and the dynamic effects of deficits. See Manldw and Romer (1991aand 1991b). The paper by Startz (1990), Woodford (1991), Gall (1994), Chaterji and Cooper (1993) and Rotemberg and Woodford (1993) are espe cially relevant for the analysis in this paper.
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  2. 4. We could have followed Ethier (1982) in assuming an intermediate good is subject to increasing returns to scale. Also see Matsuyama (1993) on this. 5. A dot over a variable denotes its time derivative, a subscript denotes a partial deriva tive and a hat a percentage change. 6. In this case there is no c1lange in tIle net debtor ])osition of the country. Human capital rises because of the increase in after tax wa.ges. Financial wealth remains unchanged. .
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  3. AuthorCs) S. Nandeibam Mrinal Datta Chaudhuri S. Nandeibam D. Jayaraj S. Subramanian K. Ghosh Dastidar Kaushik Basu Partha Sen K. Ghosh Dastidar K. Sundaram S.D. Tendulkar Sunil Kanwar Partha Sen Ranjan Ray Wietze Lise Jean Dreze Anne-C. Guio Mamta Murthi Jean Dreze Jackie Loh A Note on Randomized Social Choice and Random Dictatorships (July 1994) .
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  4. Baxter, M. and R.G. King, 1993, "Fiscal policy in general equiHbriulll," American Eco~ nomic Review, 83, 315-334. Blancllard, O.J., 1985, "Debts, deficits and finite hori zons," Journal of Political Economy, 93, 223-247. Buiter, W.H., 1~88a "Structural and stabilization aspects of fiscal and financial policy in the dependent economy," Oxf01Yl Economic Papers, 40, 220-245.
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  5. Buiter, W.H., 1988b, "Death, birth, productivity growth and debt neutrality," Economic Journal, 98, 279-293.
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  6. Buiter, W.H., 1991, "Saving and endogenous growth: a survey of theory and policy," Centre for Economic Policy Research Discussion Paper No. 606.

  7. Cha.terji, S. and R.W. Cooper, 1993, "Entry and exit, product variety and the business cycle," National Bureau of Economic Research Working Paper No. 4560.

  8. Cooper, RoW. and A. John, 1988, "Coordinating coordination failures in Keynesian Mod els," Quarterly Journal of Econo!nics, 103,441-463.

  9. Eaton, J., 1989, "Foreign public capital flows" in The Handbook of Development Eco nomic~, Vol II, H. Chenery and T.N. Srinivasan (ed), North Holland:Alllsterdam and New York.

  10. Engel, C., and K. Kletzer, 1990, "Tariffs and saving in a model wit1} new generations," Journal of International Economics, 28, 71-91.

  11. Ethier, W., 1982, "National and international returns to scale in the modern theory of international trade," American Economic Review, 72, 389-405.

  12. FOOTNOTES 1. See e.g. Baxter and King (1993), Buiter (1988a) and 13uiter (1991) and Obstfeld (1989).
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  13. Frenkel, J.A., and A. Razin, 1987, Fiscal Policies and the World Economy: An Intertem parol Approach, MIT Press:Calllbridge, MA and London, UK.

  14. Gali, J., 1994, "Monopolistic competition, business cycles and the composition of aggregate demand," Journal of Economic Theory, 63, 73-96.

  15. Grossman, G.M. and N. Yanagawa, 1993, "Asset bubbles and endogenous growth," Journal of Monetary Economics, 31, 3-19.

  16. Kiyot;aki, N., 1988, "Multiple equilibria under monopolistic competition," Quarterly Jour nal of Economics, 103, 695-713.
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  17. Mankiw, N.G., and D. Romer (eds.), 1991, New Keynesian Economics, Volumes I and II, MIT Press: Cambridge, MA and London, UK. Mankiw, N.G., "Imperfect competition and the Keynesian cross," Economics Letters, 26, 7-14 (Reprinted in Mankiw and Romer, Vol I).

  18. Matsuyama, K., 1993, "Modell1ng complimentarity in monopolistic competition," Bank of Japan Monetary and Economic Studies, 11,87-109.

  19. Obstfeld, M., 1989, "Fiscal deficits and relative price in a growing world economy," Journal of Monetary Economics, 23, 461-484.

  20. Rotemberg, J., and M~ Woodford, 1993, "Dynamic general equilibrium models with imper fectly competitive product markets," National Bureau of Economic Research Working Paper, No. 4502.

  21. Startz, R., 1990, "Dynamic aggregate demand," University of Washington, Mimeo.
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