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This thesis is comprised of three chapters on active and passive regime policy rules. The policy makers commit to simple rules in which the monetary authority follows an interest rate targeting rule while the fiscal authority follows a debt targeting rule. The first chapter determines how the conduct of fiscal policy rules interacts with optimal monetary policy rules in affecting the equilibrium determinacy when moving from continuous to discrete time. It is shown that, the local determinacy of an equilibrium path is determinate under the 'active monetary/passive fiscal' regime, while the examination of other regimes shows the indeterminacy results. These findings are in stark contrast with the case ofthe continuous time model, suggesting that the timing assumptions play an important role in determining local equilibrium. The second chapter extends the first chapter by introducing endogenous growth in line with Romer (1986)'s model of capital externality and learning-by-doing. This chapter shows that, the dynamic property of the economy around the balanced growth path is highly sensitive to the degree of externalities and price stickiness. The final chapter is an empirical work that examines the relative effect of policy regimes on long-run economic growth for a set of South- East Asian countries, namely Malaysia, Thailand and Singapore from 1971 to 2009. The Markov-switching regressions show that there exist regime switching changes in policy rules for Singapore and Thailand throughout the period covered. On the other hand, monetary policy regimes in Malaysia were characterized as passive while the fiscal regimes were active at all times. Furthermore, the Autoregressive Distributed Lag cointegration shows that in the long-run, the regime of monetary rule is important in determining the output growth in Thailand. However, the characterizations of policy rules whether 'active' or 'passive' does not really matter for economic growth in Singapore.

This thesis comprises theoretical and empirical models. In the first theoretical model, it is shown that the effect of taxes on oil production and exploration depends on how oil price rises relative to the interest rate. In the first empirical model, it is found that taxes on oil have negative effect on oil production and an oil revenue fund in Kazakhstan stabilized the government expenditure, but did not stabilize real effective exchange rates. In the second theoretical and empirical models, it is found that existence of a fund can stabilize exchange rates. Additionally, in the theoretical model, it is found that funds that follow the expenditure-based accumulation rule can stabilize exchange rates better than funds that follow the revenue-based accumulation rule. However , in the empirical model it is found that funds that follow the revenue-based accumulation rule can stabilize real effective exchange rates better than funds that follow the expenditure-based accumulation rule. In. the third theoretical model, the optimal rules for oil revenue funds that maximize intergenerational social welfare are derived under oil income certainty. ID addition, the theoretical model provides the optimal withdrawal rule for oil revenue funds after the oil is exhausted. Numerical simulations show that funds can improve intergenerational social welfare, though not always. Which rule yields the highest intergenerational social welfare depends on countries' parameters such as gross interest rate, relative risk aversion and growth rate of oil production. Some rules may be unaffordable for a government budget. If oil production does not decline, funds following expenditure-based accumulation rules yield higher social welfare than funds that follow other rules. If oil production declines, the Permanent Oil income model or "Bird-in-Hand" can yield the highest social welfare

The importance of achieving a sustainable fiscal budget deficit has received increasing attention from academics and policy-makers. A stable long-term relationship between government expenditures and revenues is a key requirement for macroeconomic stability and development. Thus, this dissertation addresses the issue of fiscal sustainability from an empirical perspective. We illustrate how different methodologies can be applied to the analysis of fiscal sustainability, some of which are novel in context of this literature. We first look at the application of an Indicator of Fiscal Sustainability, based on Blanchard (1990) and Croce and Juan-Ramon (2003), to a variety of countries. We then propose an efficient test for 'strong' fiscal sustainability, using the procedures of Horvath and Watson (1995) for inference when the cointegration vector is pre-specified. We show that regime shifts are pervasive in this context and suggest a Markov switching cointegration approach to test and model fiscal sustainability subject to regime changes. Finally, we model the dynamics of Thailand's discounted debt using the Markov switching framework developed by Davig (2005).

Orientador : Prof. Dr. Fernando Motta Correia / Dissertação (mestrado) - Universidade Federal do Paraná, Setor de Ciencias Sociais Aplicadas, Programa de Pós-Graduação em Desenvolvimento Ecônomico. Defesa : 30/03/2015 / Inclui referências : fls.57-59 / Resumo: As expectativas quanto aos efeitos da política fiscal divergem de acordo com a abordagem teórica adotada. Por um lado a abordagem Keynesiana defende o uso de políticas fiscais anticíclicas. Já trabalhos de identificação neoclássica entendem que a escolha ótima consiste na manutenção dos gastos do governo independentemente de períodos de boom ou recessão, coerente com políticas acíclicas. O objetivo deste trabalho foi analisar o efeito da política fiscal sobre a competitividade. Isso foi feito por meio da inserção de variáveis fiscais em um Modelo de Economia Dependente para uma pequena economia aberta caracterizado pela otimização intertemporal via Teoria do Controle Ótimo. Como foram considerados dois setores e dois capitais - um de bens comercializáveis e um de bens não comercializáveis - os resultados estáticos e dinâmicos ficaram sujeitos às intensidades relativas de capital, bem como ao caráter cíclico da política fiscal. As conclusões mostraram que a estabilidade dinâmica, a velocidade do ajuste e a competitividade foram favorecidas por um cenário em particular: a presença de uma baixa taxa de juros internacional; o setor de bens não comercializáveis ligeiramente mais intensivo no capital estruturas (o capital não comercializável); e a política fiscal pró-cíclica. Palavras-chave: Política fiscal. Modelo de economia dependente. Competitividade. / Abstract: Expectations about the effects of fiscal policy differs according to the theoretical approach adopted. On the one hand, a Keynesian approach defends countercyclical fiscal policies. On the other hand, models with a neoclassical identification understand optimal choices as being the maintenance of government expenditure, irrespective of booms or recessions, which represents acyclical fiscal policy. The goal of this work was to analyse the effect of fiscal policy on competitiveness. It was done by inserting fiscal policy variables into a Dependent Economy Model for a small open economy, characterized by intertemporal optimization using Optimal Control Theory. As two-sector and two-capital goods were considered - one of traded goods and one of nontraded goods - static and dynamic results were constrained to relative capital intensities and the cyclical behavior of fiscal policies. Dynamic stability, speed of adjustment and competitiveness had their best results in the presence of one particular scenario: low international interest rates; a nontraded goods sector which is slightly more intensive in capital structures (the nontraded capital); and a procyclical fiscal policy. Key words: Fiscal Policy. Dependent economy model. Competitiveness. Exchange rate.