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It is widely agreed that a fiscal rule should boost discipline and credibility, reduce macroeconomic volatility, and be easily understood. To support such goals, a government may run structural surpluses and accumulate a precautionary cushion of assets on behalf of agents who do not enjoy access...
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its currency and an exchange rate peg. This way, the central bank can implement the optimal escape from a liquidity trap … to escape from a liquidity trap. …
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