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Leeper, Eric M. - 2011

Aging populations in advanced economies are placing ever-increasing demands on government spending in the form of old-age benefits. Economies that have promised substantially more benefits than they have made provision to finance are heading into a prolonged era of fiscal stress. Unresolved...

Persistent link: https://www.econbiz.de/10013129132

Temporarily Unstable Government Debt and Inflation

Davig, Troy - 2011

Many advanced economies are heading into an era of fiscal stress: populations are aging and governments have made substantially more promises of old-age benefits than they have made provisions to finance. This paper models the era of fiscal stress as stemming from relentlessly growing promised...

Persistent link: https://www.econbiz.de/10013129225

Reply to "Generalizing the Taylor Principle : A Comment"

Davig, Troy - 2013

Farmer, Waggoner, and Zha (2009) show that a new Keynesian model with a regime-switching monetary policy rule can support multiple solutions that depend only on the fundamental shocks in the model. Their note appears to find solutions in regions of the parameter space where there should be no...

Persistent link: https://www.econbiz.de/10013095978

Inflation's Role in Optimal Monetary-Fiscal Policy

Leeper, Eric M. - 2013

We study how the maturity structure of nominal government debt affects optimal monetary and fiscal policy decisions and equilibrium outcomes in the presence of distortionary taxes and sticky prices. Key findings are: (1) there is always a role for current and future inflation innovations to...

Persistent link: https://www.econbiz.de/10013072342

Understanding Inflation as a Joint Monetary-Fiscal Phenomenon

Leeper, Eric M. - 2016

We develop the theory of price-level determination in a range of models using both ad hoc policy rules and jointly …

Persistent link: https://www.econbiz.de/10013001761

Monetary-Fiscal Policy Interactions and the Price Level : Background and Beyond

Leeper, Eric M. - 2005

The paper presents the fiscal theory of the price level in a variety of models, including endowment economies with lump …-sum taxes and production economies with proportional income taxes. We offer a microeconomic perspective on the fiscal theory by … level. Under certain assumptions on monetary and fiscal behavior, the revaluation effect reflects the fiscal theory …

Persistent link: https://www.econbiz.de/10012784238

Should Central Banks Care About Fiscal Rules?

Leeper, Eric M. - 2016

This essay aims to explain the nature of monetary and fiscal policy interactions and how those interactions could inform the fiscal rules that countries choose to follow. It makes two points: (1) monetary policy control of inflation requires appropriate fiscal backing; (2) European fiscal...

Persistent link: https://www.econbiz.de/10012979774

Fluctuating Macro Policies and the Fiscal Theory

Davig, Troy; Leeper, Eric M. - 2021

articulated by the fiscal theory of the price level. The paper quantifies that mechanism and finds it to be important in U.S. data …

Persistent link: https://www.econbiz.de/10013246400

Endogenous Monetary Policy Regime Change

Davig, Troy - 2013

This paper makes changes in monetary policy rules (or regimes) endogenous. Changes are triggered when certain endogenous variables cross specified thresholds. Rational expectations equilibria are examined in three models of threshold switching to illustrate that (i) expectations formation...

Persistent link: https://www.econbiz.de/10012754154

Generalizing the Taylor Principle

Davig, Troy - 2013

The paper generalizes the Taylor principle---the proposition that central banks can stabilize the macroeconomy by raising their interest rate instrument more than one-for-one in response to higher inflation---to an environment in which reaction coefficients in the monetary policy rule evolve...

Persistent link: https://www.econbiz.de/10012754428