Fiscal Policy and Aggregate Stability

Dr. Jianpo Xue is an Associate Professor and the Deputy Head of Department of Public Finance at School of Finance, Renmin University of China. He got a Ph.D. from the Chinese University of Hong Kong in 2008 and worked as a Research Associate there before joined Renmin University of China in 2010. His main research interests are in macroeconomics with the focus on fiscal policy, economic growth, monetary economics, and Chinese economy. His research has been published in the refereed journals as Journal of International Economics, Journal of Money, Credit and Banking, Journal of Economic Dynamics and Control, Economic Theory, Journal of Mathematical Economics, Macroeconomic Dynamics, Journal of Public Economic Theory, Journal of Macroeconomics, and Economics Letters, etc.

In reference to the recent economic downturns in the Western developed economies, the importance of balanced-budget rule in fiscal discipline is recalled the profession. But there is a concern among macroeconomists about the destabilizing nature of this fiscal rule. In this project, we aim to examine the interaction of specific market structures and tax policies that may constitute a potential destabilizing force unrelated to economic fundamentals. We investigate the mechanism through which indeterminacy, and hence endogenous economic fluctuations will or will not occur with different fiscal policies.