Abstract
Many advanced countries face on the fiscal consolidation to set some fiscal rule. For example, countries which join the Euro currency followed the Maastricht Treaty. And Japan set some commitments of fiscal discipline; e.g. “Basic Policy 2006” mentioned about the primary balance would be positive until 2011.
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Notes
- 1.
GIIPS crisis actually ruined the Maastricht Treaty.
- 2.
- 3.
- 4.
As you can see, the eigenvalues are real solutions iff \(({1+r+\rho -\varphi -\psi )}^{2}>4\left( 1+r-\varphi \right) \rho \Rightarrow \psi <1+r+\rho -\varphi +2\sqrt{\left( 1+r-\varphi \right) \rho }\). Otherwise, they are imaginary solutions.
- 5.
Because the eigenvalues are imaginary solutions.
- 6.
It may cause the limit cycle.
- 7.
Because the eigenvalues are imaginary solutions.
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Hiraga, K. (2019). Fiscal Stabilization Under Government Spending Reversal. In: Hosoe, M., Ju, BG., Yakita, A., Hong, K. (eds) Contemporary Issues in Applied Economics. Springer, Singapore. https://doi.org/10.1007/978-981-13-7036-6_13
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