Kirsanova, Tatiana (contributor); … - 2007
, the
Fiscal Theory of the Price Level literature
1
has argued that a determinate equilibrium may be possible
when no …/subsidy. Here w is the wage rate, and Υ
t
is a tax
rate on income. Q
t,t+1
is the stochastic discount factor which determines the …
riskless short term nominal interest rate i
t
has the following representation in terms of the stochastic
discount factor:
E
t …