We consider the properties of two monetary policy rules ('strict inflation targeting', 'constant money growth rule') in an intertemporal equilibrium model with flexible prices in which monetary policy is 'active', while fiscal policy is 'passive'. Specifically, we assume that the fiscal agent...

We consider the properties of two monetary policy rules (monetary targeting, Taylor-type interest rate rule) in an intertemporal equilibrium model with capital accumulation and two outside assets (government bonds, fiat money). The paper shows that the long-run behaviour of the economy depends...

We consider a dynamic general equilibrium model with collective wage bargaining and investigate how unemployment dynamics are affected by two types of budgetary policies. In line with traditional reasoning, a balanced-budget rule amplifies fluctuations in the short run, whereas an...