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This paper proposes a theory of the fiscal foundations of inflation based on imperfect knowledge and learning. The … theory is similar in spirit to, but distinct from, unpleasant monetarist arithmetic and the fiscal theory of the price level …
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"The present paper studies optimal monetary policy when the representative agent assumption is abandoned and financial wealth heterogeneity across households is introduced. Incomplete markets make households incapable of perfectly insuring against interest rate and inflation risk, creating a...
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-pricing theory, is calibrated to analyze the effects of monetary policy and financial innovation. We show that inflation can raise …
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-pricing theory, is calibrated to analyze the effects of monetary policy and financial innovation. We show that inflation can raise …
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