current and future inflation innovations to revalue government debt, reducing reliance on distorting taxes; (2) the role of … inflation in optimal fiscal financing increases with the average maturity of government debt; (3) as average maturity rises, it … is optimal to tradeoff inflation for output stabilization; (4) inflation is relatively more important as a fiscal shock …

target inflation, and fiscal policy should smooth taxes while ensuring debt sustainability. Such policy prescriptions … presuppose an ability to commit. Without that ability, the temptation to use inflation surprises to offset monopoly and tax … debt levels and short-term debt exacerbate the inflation bias. But this produces a debt stabilization bias because the …

policy mix been in place, American might have avoided the Great Inflation. Enhancing cooperation between policy makers …

uncertainty and can undermine the ability of monetary policy to control inflation and influence real economic activity in the …

taxation, modest inflation, and some reneging on the government's promised transfers. In the equilibrium, inflation …-targeting monetary policy cannot successfully anchor expected inflation. Expectational effects are always present, but need not have … large impacts on inflation and interest rates in the short and medium runs …

Taylor principle to control inflation or anchor inflation expectations. In the period leading up to the fiscal limit, the … more aggressively that monetary policy leans against inflationary winds, the more expected inflation becomes unhinged from … the inflation target. Problems confronting monetary policy are exacerbated when policy institutions leave fiscal …

-sum) tax shocks always affect output and inflation. Tax non-neutralities in the model arise solely through the mechanism …