The Fiscal Theory of Price Level with a Bubble

Markus K. Brunnermeier, Sebastian A. Merkel, Yuliy Sannikov

This paper incorporates a bubble term in the standard FTPL equation to explain why countries with persistently negative primary surpluses can have a positively valued currency and low inflation. It also provides an example with closed-form solutions in which idiosyncratic risk on capital returns depresses the interest rate on government bonds below the economy's growth rate

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Year of publication:	May 2020
Authors:	Brunnermeier, Markus K.
Other Persons:	Merkel, Sebastian A. (contributor) ; Sannikov, Yuliy (contributor)
Institutions:	National Bureau of Economic Research (contributor)
Publisher:	2020: Cambridge, Mass : National Bureau of Economic Research
Subject:	Spekulationsblase \| Bubbles \| Preisniveau \| Price level \| Finanzpolitik \| Fiscal policy \| Theorie \| Theory \| Geldpolitik \| Monetary policy

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Extent:	1 Online-Ressource illustrations (black and white)
Series:	NBER working paper series ; no. w27116
Type of publication:	Book / Working Paper
Language:	English
Notes:	System requirements: Adobe [Acrobat] Reader required for PDF files Mode of access: World Wide Web Hardcopy version available to institutional subscribers
Other identifiers:	10.3386/w27116 [DOI]
Source:	ECONIS - Online Catalogue of the ZBW

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