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Optimal Monetary and Fiscal Policy : A Linear-Quadratic Approach

Benigno, Pierpaolo; Woodford, Michael - 2004

We propose an integrated treatment of the problems of optimal monetary and fiscal policy, for an economy in which prices are sticky (so that the supply-side effects of tax changes are more complex than in standard fiscal analyses) and the only available sources of government revenue are...

Persistent link: https://www.econbiz.de/10014071466

Optimal Monetary and Fiscal Policy in a Liquidity Trap

Eggertsson, Gauti B. - 2012

In previous work (Eggertsson and Woodford, 2003), we characterized the optimal conduct of monetary policy when a real disturbance causes the natural rate of interest to be temporarily negative, so that the zero lower bound on nominal interest rates binds, and showed that commitment to a...

Persistent link: https://www.econbiz.de/10013102000

Fiscal Consolidation in an Open Economy

Lindé, Jesper - 2012

This paper uses a New Keynesian DSGE model of a small open economy to compare how the effects of fiscal consolidation differ depending on whether monetary policy is constrained by currency union membership or by the zero lower bound on policy rates. We show that there are important differences...

Persistent link: https://www.econbiz.de/10013106226

Optimal Monetary and Fiscal Policy : A Linear-Quadratic Approach

Benigno, Pierpaolo; Woodford, Michael - 2021

We propose an integrated treatment of the problems of optimal monetary and fiscal policy, for an economy in which prices are sticky and the only available sources of government revenue are distorting taxes. Our linear-quadratic approach allows us to nest both conventional analyses of optimal...

Persistent link: https://www.econbiz.de/10013319348

Fiscal Stimulus in Liquidity Traps : Conventional or Unconventional Policies?

RPS Submitter, Banque de France; Lemoine, Matthieu; … - 2021

Recent influential work argue that a gradual increase in sales tax stimulates economic activityin a liquidity trap by … boosting inflation expectations. Higher public infrastructure investmentshould also be more expansive in a liquidity trap than …

Persistent link: https://www.econbiz.de/10013229870

Optimal Inflation Targeting Under Alternative Fiscal Regimes

Benigno, Pierpaolo; Woodford, Michael - 2021

Standard discussions of flexible inflation targeting as an optimal monetary policy abstract completely from the consequences of monetary policy for the government budget. But at least some of the countries now adopting inflation targeting have substantial difficulty in controlling fiscal...

Persistent link: https://www.econbiz.de/10013238733

Fiscal Stimulus in Liquidity Traps : Conventional or Unconventional Policies?

Lindé, Jesper; Lemoine, Matthieu - 2022

Recent influential work argue that a gradual increase in the sales tax stimulates economic activity in a liquidity trap … by boosting inflation expectations. Higher public infrastructure investment should also be more expansive in a liquidity … in alternative model environments. We therefore conclude that fiscal policymakers in liquidity traps should consider …

Persistent link: https://www.econbiz.de/10013289892

Fiscal and Monetary Stabilization Policy at the Zero Lower Bound : Consequences of Limited Foresight

Woodford, Michael; Xie, Yinxi - 2022

This paper reconsiders the degree to which macroeconomic stabilization is possible when the zero lower bound is a relevant constraint on the effectiveness of conventional monetary policy, under an assumption of bounded rationality. In particular, we reconsider the potential role of...

Persistent link: https://www.econbiz.de/10013291981

Fiscal stimulus in liquidity traps : conventional or unconventional policies?

Lemoine, Matthieu; Lindé, Jesper - In: European economic review : EER 151 (2023), pp. 1-43

Persistent link: https://www.econbiz.de/10014235171

U.S. And Euro Area Monetary and Fiscal Interactions During the Pandemic : A Structural Analysis

Hodge, Andrew; Jakab, Zoltan; Lindé, Jesper; Nguyen, … - 2022

This paper employs a two-country New Keynesian DSGE model to assess the macroeconomic impact of the changes in monetary policy frameworks and the fiscal support in the U.S. and euro area during the pandemic. Moving from a previous target of “below, but close to 2 percent” to a formal...

Persistent link: https://www.econbiz.de/10014237881