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CREDIT, MONEY AND THE GOVERNMENT BUDGET CONSTRAINT
Author(s) -
Hillier Brian,
Ibrahimo M. V.
Publication year - 1993
Publication title -
bulletin of economic research
Language(s) - English
Resource type - Journals
SCImago Journal Rank - 0.227
H-Index - 29
eISSN - 1467-8586
pISSN - 0307-3378
DOI - 10.1111/j.1467-8586.1993.tb00569.x
Subject(s) - constraint (computer aided design) , budget constraint , economics , government (linguistics) , shock (circulatory) , bond market , monetary economics , money market , macroeconomics , microeconomics , monetary policy , mechanical engineering , medicine , linguistics , philosophy , engineering
A credit market is introduced into an IS‐LM model with wealth effects and the government budget constraint explicitly considered, The model is able to handle issues such as a credit market shock that would be impossible to examine in standard models without a credit market. The analysis of more standard policies or shocks is enhanced by recognition of the role of the credit market, thus supporting the view that such recognition is both feasible and warranted.