01998nam a2200289 a 4500 1/51402 080128s2008 be u pdd 1 a0eng d 9789279082511 1016-8060 (print) 1725-3187 (online) KC-AI-08-326-EN-C 37591 GR-PeUP ΚΕΤ Αλφαβητική σειρά Buti, Marco. 'Constrained flexibility' as a tool to facilitate reform of the EU budget / Marco Buti, Mario Nava. Brussels- Belgium : European Comission : Directorate-General for Economic and Financial Affairs, 2008. 23 σ. : διαγ. πιν. ; 30 εκ. European Economy. Economic papers ; Economic Papers. Some researchers have recently introduced productive government investment spending into Dynamic stochastic general equilibrium (DSGE) models, adding a supply channel. This paper takes a similar perspective but it also introduces the government consumption good into the household utility function and this consumption good is supplied by a government production function. While higher government investment can increase private output and household consumption in the future, in the short run household utility is likely to decline because current consumption of private and government goods is shifted into investment and the supply of privately produced consumption goods is reduced. These considerations are especially relevant for euro-area members because fiscal policy is their only national macroeconomic policy tool. Nava, Mario. European Commission : Directorate-General for Economic and Financial Affairs. Economic Papers June 2008, No 326. European Economy. Economic papers ; 326. INST UNIPILB KET 20090212 EEEP 326 EEEP 326 NOLOAN 23 1 http://ec.europa.eu/economy_finance/publications/publication_summary12664_en.htm.