Autori
Chirco, Alessandra
Colombo, Caterina

Titolo
Demand Elasticity and Fiscal Policy.
Periodico
Università degli studi di Lecce - Dipartimento di Scienze Economiche e Matematico-Statistiche. Quaderni. Collana di economia
Anno: 2002 - Fascicolo: 3 - Pagina iniziale: 1 - Pagina finale: 20

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.




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