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Fiscal policy in a monetary economy with capital and finite lifetime

Annicchiarico, Barbara; Giammarioli, Nicola; … - European Central Bank - 2006

This paper develops a dynamic stochastic general equilibrium model with nominal rigidities, capital accumulation and finite lifetimes. The framework exhibits intergenerational wealth effects and is intended to investigate the macroeconomic implications of fiscal policy, which is specified by...

Persistent link: https://www.econbiz.de/10005344905

Fiscal convergence before entering the EMU

Onorante, Luca - European Central Bank - 2006

The monetary integration of the acceding countries will proceed in several distinct steps, starting with membership in the European Union (EU), followed by participation in the so-called Exchange Rate Mechanism (ERM) II and ultimately entry into the euro area. This paper addresses the question...

Persistent link: https://www.econbiz.de/10005344947

What accounts for the changes in U.S. fiscal policy transmission?

Bilbiie, Florin O.; Meier, André; Müller, Gernot J. - European Central Bank - 2006

Using vector autoregressions on U.S. time series for 1957-1979 and 1983-2004, we find government spending shocks to have stronger effects on output, consumption, and wages in the earlier sample. We try to account for this observation within a DSGE model featuring price rigidities and limited...

Persistent link: https://www.econbiz.de/10005344962

Government bond risk premia and the cyclicality of fiscal policy

Christoffel, Kai; Jaccard, Ivan; Kilponen, Juha - European Central Bank - 2011

We introduce a specification of habit formation featuring non-separability between consumption and leisure into an otherwise standard New Keynesian model. The model can be estimated with standard Bayesian techniques and the bond pricing implications are evaluated using higher-order...

Persistent link: https://www.econbiz.de/10009399786

Compatibility Between Monetary and Fiscal Policy Under EMU

leith, Campbell; Wren-Lewis, Simon - Department of Economics, Adam Smith Business School

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

Persistent link: https://www.econbiz.de/10005729948

Interactions Between Monetary and Fiscal Policy under Flexible Exchange Rates

Leith, Campbell; Wren-Lewis, Simon - Department of Economics, Adam Smith Business School

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 …

Persistent link: https://www.econbiz.de/10005729954

Electoral uncertainty and the deficit bias in a New Keynesian Economy

Leith, Campbell; Wren-Lewis, Simon - Department of Economics, Adam Smith Business School - 2008

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 …

Persistent link: https://www.econbiz.de/10005729959

Fiscal Sustainability in a New Keynesian Model - Additional Appendix

Leith, Campbell; Wren-Lewis, Simon - Department of Economics, Adam Smith Business School - 2012

Recent work on optimal monetary and fiscal policy in New Keynesian models suggests that it is optimal to allow steady-state debt to follow a random walk. Leith and Wren-Lewis (2012) consider the nature of the timeinconsistency involved in such a policy and its implication for discretionary...

Persistent link: https://www.econbiz.de/10010896995

Inflation forecasting in the new EU Member States

Arratibel, Olga; Kamps, Christophe; Leiner-Killinger, Nadine - European Central Bank - 2009

To the best of our knowledge, our paper is the first systematic study of the predictive power of monetary aggregates for future inflation for the cross section of New EU Member States. This paper provides stylized facts on monetary versus non-monetary (economic and fiscal) determinants of...

Persistent link: https://www.econbiz.de/10005002771

When is monetary policy all we need?

Eser, Fabian; Leith, Campbell; Wren-Lewis, Simon - Department of Economics, Adam Smith Business School - 2009

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

Persistent link: https://www.econbiz.de/10005012846