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Exchange rates depreciate by the difference between the domestic and foreign marginal utility growths. Exchange rates vary a lot , as much as 10% per year. However, equity premia imply that marginal utility growths vary much more, by at least 50% per year. This means that marginal utility...
Persistent link: https://www.econbiz.de/10012470316
The fiscal theory says that the price level is determined by the ratio of nominal debt to the present value of real … primary surpluses. I analyze long-term debt and optimal policy in the fiscal theory. I find that the maturity structure of the …
Persistent link: https://www.econbiz.de/10012472043
The fiscal theory of the price level can describe monetary policy. Governments can set interest rate targets and …
Persistent link: https://www.econbiz.de/10012455701
determine inflation in this regime, so I base the analysis on the fiscal theory of the price level. I find that monetary policy …
Persistent link: https://www.econbiz.de/10012458052