price economy with monopolistic distortions. Monetary policy determines nominal interest rates and fiscal policy provides …

-maximizing levels. In effect, a small stock of debt combined with restrictions on a central bank’s portfolio can put the economy on the … inflation rates implied by a decline in the stock of government debt outstanding. Unless the economy is on the Pareto inferior …

describes an open economy, with capital accumulation, and where nominal rigidities are present. The model shows that previous … findings drawn from open economy models—in particular with respect to the characteristics of optimal monetary policy—do not …