Beetsma, Roel; Bovenberg, A Lans - C.E.P.R. Discussion Papers - 2003
public spending. Under commitment, optimal stabilization is obtained by combining an inflation target that is contingent on … which it occurs. With only a shock-contingent inflation target, the political shock is spread out over time through debt … decumulate debt over time, so that in the long run all targets (for inflation, output and public spending) are attained. A …