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control inflation and influence the economy in the usual ways. The paper discusses models of fiscal limits and their … implications and lays out a research agenda to integrate political economy and empirical considerations with general equilibrium …
Persistent link: https://www.econbiz.de/10013129132
We use Bayesian prior and posterior analysis of a monetary DSGE model, extended to include fiscal details and two distinct monetary-fiscal policy regimes, to quantify government spending multipliers in U.S. data. The combination of model specification, observable data, and relatively diffuse...
Persistent link: https://www.econbiz.de/10013017938
For over a century social analysts have debated the connection between trade policy and economic performance. This controversy continues today, even as the world is experiencing an unprecedented period of trade liberalization, and in spite of numerous empirical studies that claim to have found a...
Persistent link: https://www.econbiz.de/10013230185
This paper analyzes the relationship between trade policy and economic performance. The paper is divided in two fundamental parts. The first one uses a cross country data set to investigate the relationship between trade policy and productivity growth. It is found that countries that are more...
Persistent link: https://www.econbiz.de/10013230598
macro economy and that these parallels are sufficient to lead us to think about transforming fiscal policy and fiscal …
Persistent link: https://www.econbiz.de/10013151140
This essay aims to explain the nature of monetary and fiscal policy interactions and how those interactions could inform the fiscal rules that countries choose to follow. It makes two points: (1) monetary policy control of inflation requires appropriate fiscal backing; (2) European fiscal...
Persistent link: https://www.econbiz.de/10012979774
The textbook optimal policy response to an increase in government debt is simple—monetary policy should actively target inflation, and fiscal policy should smooth taxes while ensuring debt sustainability. Such policy prescriptions presuppose an ability to commit. Without that ability, the...
Persistent link: https://www.econbiz.de/10012890475
Every economy faces a "fiscal limit" that delivers the maximum government debt-GDP ratio that can be sustained without …
Persistent link: https://www.econbiz.de/10013085489
We study how the maturity structure of nominal government debt affects optimal monetary and fiscal policy decisions and equilibrium outcomes in the presence of distortionary taxes and sticky prices. Key findings are: (1) there is always a role for current and future inflation innovations to...
Persistent link: https://www.econbiz.de/10013072342
rule) in one regime is not sufficient to insulate the economy against tax shocks in that regime and it can have the …
Persistent link: https://www.econbiz.de/10013323486