Annicchiarico, Barbara; Marini, Giancarlo - In: Topics in Macroeconomics 5 (2005) 1, pp. 1225-1225
This paper studies the issue of price stability in a continuous time optimizing general equilibrium model with overlapping generations. It is shown that fiscal policy has effects on nominal variables. Fiscal expansions are inflationary even when the government intertemporal budget constraint is...