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Uncertain Duration of Reform : Dynamic Implications

Calvo, Guillermo A. - 1997

We develop a framework to study the effects of policies of uncertain duration on consumption dynamics under both complete and incomplete markets. We focus on the dynamic implications of market incompleteness, specifically on the lack of state-contingent bonds. Two policies are considered: pure...

Persistent link: https://www.econbiz.de/10012472899

Managing an Energy Shock : Fiscal and Monetary Policy

Auclert, Adrien; Monnery, Hugo; Rognlie, Matthew; … - National Bureau of Economic Research - 2023

This paper studies the macroeconomic effects of energy price shocks in energy-importing economies using a heterogeneous-agent New Keynesian model. When MPCs are realistically large and the elasticity of substitution between energy and domestic goods is realistically low, increases in energy...

Persistent link: https://www.econbiz.de/10014337777

Navigating by Falling Stars : Monetary Policy with Fiscally Driven Natural Rates

Campos, Rodolfo G.; Fernández-Villaverde, Jesús; … - National Bureau of Economic Research - 2024

We study a new type of monetary-fiscal interaction in a heterogeneous-agent New Keynesian model with a fiscal block. Due to household heterogeneity, the stock of public debt affects the natural interest rate, forcing the central bank to adapt its monetary policy rule to the fiscal stance to...

Persistent link: https://www.econbiz.de/10014512073

Tax Base Variability and Procyclical Fiscal Policy

Talvi, Ernesto - 2000

Based on a sample of 56 countries, we find that while fiscal policy in the G-7 countries appears to be broadly consistent with Barro's tax smoothing proposition, in developing countries government spending and taxes are highly procyclical (i.e., government spending rises and taxes fall during...

Persistent link: https://www.econbiz.de/10012471277

What Ends Recessions?

Romer, Christina D. - 1994

This paper analyzes the contributions of monetary and fiscal policy to postwar economic recoveries. We find that the Federal Reserve typically responds to downturns with prompt and large reductions in interest rates. Discretionary fiscal policy, in contrast, rarely reacts before the trough in...

Persistent link: https://www.econbiz.de/10012474154

Optimal Fiscal Policy in a Business Cycle Model

Chari, V. V. - 1993

This paper develops the quantitative implications of optimal fiscal policy in a business cycle model. In a stationary equilibrium the ex ante tax rate on capital income is approximately zero. There is an equivalence class of ex post capital income tax rates and bond policies that support a given...

Persistent link: https://www.econbiz.de/10012474455

Successful Adjustment in a Multi-Sectoral Economy

Aizenman, Joshua - 1987

This study analyzes the adjustment to a fiscal reform in a dependent economy. It evaluates the economic factors that … credibility of the fiscal reform. It is shown that the absence of credibility may have major consequences on the adjustment …, because it will depress the magnitude of the private investment associated with the fiscal reform …

Persistent link: https://www.econbiz.de/10012476867

Expected Fiscal Policy and the Recession of 1982

Branson, William H. - 1985

The Economic Recovery Tax Act of 1981 had one aspect that is unusually useful for economic analysis. It provided an example of a clear-cut announcement of future policy actions at specified dates.This provides an opportunity to apply recent advances in the analysis of expectations dynamics to...

Persistent link: https://www.econbiz.de/10012477293

Effects of Fiscal Policy on Credit Markets

Auerbach, Alan J. - 2020

Credit markets typically freeze in recessions: access to credit declines and the cost of credit increases. A conventional policy response is to rely on monetary tools to saturate financial markets with liquidity. Given limited space for monetary policy in the current economic conditions, we...

Persistent link: https://www.econbiz.de/10012479179

The Monetary and Fiscal History of Brazil, 1960-2016

Ayres, Joao - 2019

Brazil has had a long period of high inflation. It peaked around 100 percent per year in 1964, decreased until the first oil shock (1973), but accelerated again afterward, reaching levels above 100 percent on average between 1980 and 1994. This last period coincided with severe balance of...

Persistent link: https://www.econbiz.de/10012479377