A traditional function of the central bank is to control the price level. The fiscal theory of the price level challenges this assumption, arguing instead that the fiscal authority's budgetary policy is the primary determinant of the price level. The authors provide a critical review of the...

Price stability is an important goal of public policy. To reach this goal, two key questions must be addressed: How can price stability be achieved? And, how much price stability is desirable? The authors review the fiscal theory of the price level, with special emphasis on its implications for...

For some time, the use of monetary and fiscal policies to smooth business cycle fluctuations has taken a back seat to longer term objectives of restoring price stability and fiscal balance. More recently, however, weaker economic performance in some of the world’s economies, most notably in...

After two decades of successfully restoring price stability in much of the world economy, central banks begin the next millennium facing a new set of challenges. One key task is how to conduct monetary policy in an era of price stability. Clearly, policymakers would like inflation to remain...

For some time, the use of monetary and fiscal policies to smooth business cycle fluctuations has taken a back seat to longer term objectives of restoring price stability and fiscal balance. More recently, however, weaker economic performance in some of the world’s economies, most notably in...

For some time, the use of monetary and fiscal policies to smooth business cycle fluctuations has taken a back seat to longer term objectives of restoring price stability and fiscal balance. More recently, however, weaker economic performance in some of the world’s economies, most notably in...