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Leeper, Eric M. - 2010

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

Persistent link: https://www.econbiz.de/10013136545

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

Optimal Time-Consistent Monetary, Fiscal and Debt Maturity Policy

Leeper, Eric M. - 2019

The textbook optimal policy response to an increase in government debt is simple—monetary policy should actively target inflation, and fiscal policy should smooth taxes while ensuring debt sustainability. Such policy prescriptions presuppose an ability to commit. Without that ability, the...

Persistent link: https://www.econbiz.de/10012890475

Fiscal Limits and Monetary Policy

Leeper, Eric M. - 2013

appreciable risk of default or higher inflation. But governments in advanced economies issue substantial nominal debt and nominal …

Persistent link: https://www.econbiz.de/10013085489

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

Modest Policy Interventions

Leeper, Eric M.; Zha, Tao A. - 2021

We present a framework for computing and evaluating linear projections of macro variables conditional on hypothetical paths of monetary policy. A modest policy intervention is a change in policy that does not significantly shift agents' beliefs about policy regime and does not generate...

Persistent link: https://www.econbiz.de/10013247250

Fiscal Limits in Advanced Economies

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

Monetary and Fiscal Policy Switching

Davig, Troy; Leeper, Eric M.; Chung, Hess - 2022

A growing body of evidence finds that policy reaction functions vary substantially over different periods in the United States. This paper explores how moving to an environment in which monetary and fiscal regimes evolve according to a Markov process can change the impacts of policy shocks. In...

Persistent link: https://www.econbiz.de/10013323486

Clearing Up the Fiscal Multiplier Morass : Prior and Posterior Analysis

Leeper, Eric M. - 2015

We use Bayesian prior and posterior analysis of a monetary DSGE model, extended to include fiscal details and two distinct monetary-fiscal policy regimes, to quantify government spending multipliers in U.S. data. The combination of model specification, observable data, and relatively diffuse...

Persistent link: https://www.econbiz.de/10013017938

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