This paper clarifies and extends previous work on the equivalence between monetary regimes and fiscal regimes involving social security systems. We show that monetary regimes involving currency and unbacked bonds, with or without reserve requirements, are equivalent to one or both of two...

This paper clarifies and extends previous work on the equivalence between monetary regimes and fiscal regimes involving social security systems. We show that monetary regimes involving currency and unbacked bonds, with or without reserve requirements, are equivalent to one or both of two...

In this paper we examine the interactions between fiscal and monetary policy in an economy with financial frictions, where fiat money, bank deposits and short and long-term nominal bonds coexist. Because agents face information frictions and bankers have limited commitment, fiat money is always...