In models with complete markets, targeting core inflation enables monetary policy to maximize welfare by replicating … stabilize price movements in the flexible price sector. Also, in the presence of financial frictions, stabilizing core inflation … frictions a welfare-maximizing central bank should adopt flexible headline inflation targeting--a target based on headline …

This paper presents a prototype model for development of the fiscal theory of the price level.' In this simple setting …, the fiscal theory's distinctiveness relies upon adoption of a bubble solution, rather than the rational …

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 …

We demonstrate that the Fiscal Theory of the Price Level (FTPL) cannot be used to determine the price level uniquely in …

control of the price level. Price level determination under such regimes can be understood in terms of a 'fiscal theory of the … the fiscal theory of the price level to exogenous-money regimes is sketched as well …

The recently-developed fiscal theory of price level determination contends that there is an important class of policy …

Price level targeting (without base drift) and inflation targeting (with base drift) are compared under commitment and … discretion, with persistence in unemployment. Price level targeting is often said to imply more short-run inflation variability … and thereby more employment variability than inflation targeting. Counter to this conventional wisdom, under discretion a …

The fiscal theory says that the price level is determined by the ratio of nominal debt to the present value of real … primary surpluses. I analyze long-term debt and optimal policy in the fiscal theory. I find that the maturity structure of the … debt matters. For example, it determines whether news of future deficits implies current inflation or future inflation …

We review the fiscal theory of the price level. We place special emphasis on the theory's implications for the …