This paper extends a well-known macroeconomic stabilization game between monetary and fiscal authorities introduced by Dixit and Lambertini (American Economic Review, 93: 1522-1542) to multiplicative (policy) uncertainty. We find that even if fiscal and monetary authorities share a common output...

This paper extends the stabilization game between monetary and fiscal authorities to the case of multiplicative (model) uncertainty. In this context, the “symbiosis assumption”, i.e. fiscal and monetary policy share the same ideal targets, no longer guarantees the achievement of ideal output...

Despite the increasing number of studies on monetary policy uncertainty, its role on the strategic interaction between fiscal and monetary policies has not been fully explored. Our paper aims to fill this gap by evaluating the consequences produced by multiplicative uncertainty in such a context.

We challenge the widely held belief that New-Keynesian models cannot predict optimal positive inflation rates. In fact these are justi…fied by the Phelps argument that monetary fi…nancing can alleviate the burden of distortionary taxation. We obtain this result because, in contrast with...

By viewing trade unions as economic units analogous to firms, which can be studied by applying the standard tools of microeconomic analysis, this article aims to derive the optimal degree of union centralization in a multi-unions simple general equilibrium model. Differently from previous...

L’ambiente per sua natura è un bene pubblico e la sua tutela richiede, quindi, qualche tipo d’intervento. L’uso delle risorse naturali per attività economiche, anziché a fini di protezione ambientale, ad esempio, può essere regolato a livello di comunità locale per evitare un...

In a unionized economy with endogenous fiscal policy central bank transparency has two contrasting effects on wages, the relative strength of which determines the macroeconomic performance. This finding allows us to demonstrate that (i) if the central bank is populist the effect of transparency...

This paper generalizes the classical theory of economic policy to a static LQ-strategic context between n players. We show how this generalized version of controllability can profitably be used to deal with policy ineffectiveness issues and Nash equilibrium existence.

This paper investigates the effects of cooperation (corporatism) on macroeconomic performance by considering a rather standard policy game between the government and a monopoly union. We stress the shortcomings of the traditional way used to model cooperation in policy games (the maximization of...