Marattin, Luigi; Marzo, Massimiliano; Zagaglia, Paolo - In: International Review of Economics & Finance 25 (2013) C, pp. 219-243
We introduce distortionary taxes on consumption, labor and capital income into a New Keynesian model with Calvo pricing and nominal bonds. We study the relation between tax instruments and optimal monetary policy by computing simple rules for monetary and fiscal policy when one tax instrument at...