Policy Uncertainty, Symbiosis, and the Optimal Fiscal and Monetary Conservativeness

This paper extends the stabilization game between monetary and fiscal authorities to the case of multiplicative (model) uncertainty. In this context, the “symbiosis assumption”, i.e. fiscal and monetary policy share the same ideal targets, no longer guarantees the achievement of ideal output and inflation, unless the ideal output is equal to its natural level. A time consistency problem arises.

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Year of publication:	2005-08-05
Authors:	Bartolomeo, Giovanni Di ; Giuli, Francesco ; manzo, Marco
Institutions:	EconWPA
Subject:	Monetary-fiscal policy interactions \| uncertainty \| symbiosis

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Extent:	application/pdf
Series:	Macroeconomics.
Type of publication:	Book / Working Paper
Notes:	Type of Document - pdf; pages: 21 21 pages
Classification:	E61 - Policy Objectives; Policy Designs and Consistency; Policy Coordination ; E63 - Comparative or Joint Analysis of Fiscal and Monetary Policy; Stabilization
Source:	RePEc - Research Papers in Economics

Persistent link: https://www.econbiz.de/10005561308