stability. In this paper, we relax the assumptions underpinning the FTPL by developing a two country open economy model, where …

operating under flexible exchange rates has suggested that, in contrast to the closed economy FTPL, insolvent fiscal policy may … FTPL by developing a two country open economy model, where each country has overlapping generations of non … stabilise the debt of another fiscal authority, and there is no requirement that these policy makers operate in the same economy …

Political Economy, has focused on real economies where there is strategic use of policy instruments in a world of political … conflict. In this paper we combine these literatures and assume that policy is set in a New Keynesian economy by one of two …/or composition). Given the environment, policy shall be realistically constrained to be time-consistent. In a sticky-price economy …

We consider optimal monetary and fiscal policies in a New Keynesian model of a small open economy with sticky prices …

to optimal monetary policy. We explore this consensus assignment in an economy subject to ‘deep’ habits at the level of … economy subject to the additional externality of deep habits and explore the ability of simple (but potentially nonlinear …

risk of inflation faced by the US economy. …

calibrated to the U.S. economy. We find that fiscal volatility shocks have an adverse effect on economic activity that is …