Dr. Qingyuan Du is currently a senior lecturer at the Department of Economics, Monash University. He obtained his PhD from Columbia University in 2011. His main research fields are international economics and macroeconomics. He has been awarded grants by the Australian Research Council (ARC). His works have appeared in Review of Economic Dynamics, Journal of International Economics, among others.
Personal Website: https://research.monash.edu/en/persons/qingyuan-du
1. 13:00-15:25, Tuesday, November 19, 2024
2. 13:00-15:25, Wednesday, November 20, 2024
3. 14:45-17:10, Thursday, November 21, 2024
4. 14:45-17:10, Friday, November 22, 2024
Classroom: Room 703, Duxing Building, DUFE
This short course is designed to provide a comprehensive understanding of how fiscal policies can impact a country's output, inflation, and foreign debt position within the context of a small open economy. In this short course we cover 4 topics. We assess welfare implications across various policy scenarios and aim to provide answers to two questions: i) fiscal policy can play a stabilizing role in the macroeconomy, particularly in situations where a country faces constraints on adjusting its exchange rate, and ii) how fiscal policy can enhance domestic welfare in a small open economy that encounters significant frictions in financial market or factor markets.
Topic 1 focuses on the fiscal devaluation literature, particularly the work of Farhi, Gopinath, and Itskhoki (2012). We examine various combinations of fiscal policy tools within a fixed nominal exchange rate regime, demonstrating that there are revenue-neutral policy instruments capable of facilitating exchange rate devaluation, despite the nominal exchange rate being fixed.
Topic 2 explores the roles of capital control policies and domestic fiscal policy tools (such as government spending policies) in preventing the overborrowing problem in a small open economy, as in Bianchi (2011). We evaluate the distribution of foreign debt and welfare outcomes under various policy tools.
Topic 3 analyzes how fiscal policy tools, such as capital control policy and consumption tax, may help reduce the involuntary unemployment in small open economies with fixed exchange rates (Schmitt-Grohe and Uribe, 2012).
Topic 4 studies the Ramsey policy under fixed exchange rates and nominal wage rigidities (Du et al., 2024). We demonstrate that the government may optimally utilize adjustments in total government spending, as well as changes in the composition of public investment and consumption, to smooth consumption, reduce unemployment, and achieve higher welfare.