Modelling the Effects of Fiscal Policy Choices on Debt, Crises and Recovery for Small Open Economies

  • Richard Hatfield

Student thesis: Doctoral ThesisPhD


Crises have littered human history with serious consequences for both the country and its people. The 2008 Great Recession and Asian Financial Crisis are exemplars of such serious economic and social damage that took many years to recover. Debt default is one of the main contributors to crises and has long lasting effects on the economy. This thesis illustrates a macroeconomic model for Open Economies that can simulate a range of economic policy settings and strategies for managing debt in a crisis. The simulations provide insight into the possible outcomes for small and medium sized economies that may aid policy development to prevent and mitigate the effects of a crisis. Moreover, this thesis explores the economic and political ideologies and how they have influenced macroeconomic policy development with potentially negative outcomes for the least able in society. Rather than use one economic ideology, the underpinning analysis draws on many different economic schools to interpret what is a neoclassical Real Business Cycle style model with many extensions and adaptations. This model and its software system is adaptable to a wide range of country settings that can support the evaluation of possible economic policy, debt and crisis management strategies. The underlying system is extensible permitting the exploration of new or alternate fiscal policy options and strategies.
Date of Award24 Mar 2021
Original languageEnglish
Awarding Institution
  • University of Bath
SupervisorMaik Schneider (Supervisor) & Christopher Martin (Supervisor)


  • Macroeconomics
  • crises
  • keynesian
  • bailouts
  • fiscal policy

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