Greetings Everyone,
I’m currently exploring ways to determine the optimal allocation between spending and investment, and I was considering using the Ramsey model. However, as I delve deeper into the topic, I’ve noticed that the majority of studies and research papers tend to concentrate on the optimization of monetary policy. While I usually refer to the teachings @ Willi Mutschler, I’m facing challenges in finding relevant assistance for my specific needs. Can you please guide me on how to proceed and locate the solution I’m looking for?
What exactly are you looking for? There is a long literature on simple rules, e.g.
https://doi.org/10.1016/j.jmoneco.2006.07.002
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Thank you so much, I will refer to the papers.
In my model, which incorporates fiscal shocks, I aim to make it more intriguing by exploring the optimal allocation between government spending and investment.
That is a tricky question to answer empirically because we don’t have good estimates of the productivity of government investment and how government consumption enters utility.