This paper studies the interdependence between fiscal and monetary policies, and their joint role in the determination of the price level. The government is characterized by a long-run fiscal policy rule whereby a given fraction of the outstanding debt, say d, is backed by the present discounted...

This paper exploits the term structure of interest rates to develop testable economic restrictions on the joint process of long-term interest rates and inflation when the latter is subject to a targeting policy by the Central Bank.

We ask how the three known mechanisms for solving cost sharing problems with homogeneous cost functions - the value, the proportional, and the serial mechanisms - should be extended to arbitrary problem. We propose the Ordinality axiom, which requires that cost shares be invariante under all...

This paper studies the proposition that an inflation bias can arise in a setup where a central banker with asymmetric preferences targets the natural unemloyment rate.