La política fiscal compensatoria

Abstract

This paper develops a model to analyze the use of fiscal policy as a tool to attenuate the business cycle. It is considered in this way the trend level over which it can be triggered the compensatory measures, the limitations on fiscal policy, as for example, the discount of future tax liabilities associated to an increase in public debt, the substitution of public expenditure for private expenditure, the leakage by the external sector of the higher internal demand, etc. In the paper it is given consideration to the reversions in the long-run of short-run fiscal policies. The small open economy is specially analyzed as well as what level of deficit is relevant for policy, the nominal deficit or that one adjusted by inflation.