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Interactions between Monetary and Fiscal Policy Under Flexible Exchange Rates

Leith, Campbell; Wren-Lewis, Simon - 2003

(1995), under the heading of the 'Fiscal Theory of the Price Level' (FTPL). Applications of this theory to open economies …

Persistent link: https://www.econbiz.de/10014101415

Fiscal Histories

Cochrane, John H. - National Bureau of Economic Research - 2022

The fiscal theory states that inflation adjusts so that the real value of government debt equals the present value of … fiscal theory to interpret historical episodes, including the rise and fall of inflation in the 1970s and 1980s, the long … pegs, the ends of hyperinflations, currency crashes, and the success of inflation targets. Going forward, fiscal theory …

Persistent link: https://www.econbiz.de/10013361983

The advantage of flexible targeting rules

Ferrero, Andrea (contributor) - 2008

This paper investigates the consequences of debt stabilization for inflation targeting. If the monetary authority perfectly stabilizes inflation while the fiscal authority holds constant the real value of debt at maturity, the equilibrium dynamics might be indeterminate. However, determinacy can...

Persistent link: https://www.econbiz.de/10003781675

Power of many : assessing the economic impact of the global fiscal stimulus

De Resende, Carlos; Lalonde, René; Snudden, Stephen - 2010

The Bank of Canada Global Economy Model (BoC-GEM) is used to examine the effect of various types of discretionary fiscal policies on different regions of the globe. The BoC-GEM is a microfounded dynamic stochastic general-equilibrium global model with six regions, multiple sectors, and...

Persistent link: https://www.econbiz.de/10003933262

Optimal Monetary Rules in a Context of Fiscal Disequilibrium : Evidence from Brazil (1996:I-2007:I)

Almeida, Charles Lima - 2012

This paper aims to derive an optimal monetary policy rule in a context of fiscal disequilibrium. We analyze the transmission channels of the fiscal and monetary policies through estimation of a Philips curve and the fiscal IS curve. The results indicate that the fiscal deficit is statistically...

Persistent link: https://www.econbiz.de/10013105841

Commitment vs. Discretion in the UK : An Empirical Investigation of Monetary and Fiscal Policy Regime

Kirsanova, Tatiana - 2013

This paper investigates the conduct of monetary and fiscal policy in the post-ERM period in the UK. Using a simple DSGE New Keynesian model of non-cooperative monetary and fiscal policy interactions under fiscal intra-period leadership, we demonstrate that the past policy in the UK is better...

Persistent link: https://www.econbiz.de/10013092801

Counter-cyclical fiscal rules and the zero lower bound

Hauptmeier, Sebastian; Kamps, Christophe; Radke, Lucas - 2022

We analyse the effectiveness of optimal simple and implementable monetary and fiscal policy rules in stabilising economic activity, inflation and government debt in face of an occasionally binding lower bound on the nominal interest rate in a New Keynesian model. We show that, within the...

Persistent link: https://www.econbiz.de/10013342236

The Macroeconomic Policy Mix in a Monetary Union with Flexible Inflation Targeting

Andersen, Torben M. - 2003

Policy mix problems may arise in a monetary union with centralized monetary policy and decentralized fiscal policy. A consequence of this may be an inappropriate stabilization of shocks. This paper addresses how policy coordination problems are affected by the objectives of the monetary...

Persistent link: https://www.econbiz.de/10014094279

Liquidity Traps with Global Taylor Rules

Schmitt-Grohé, Stephanie; Uribe, Martín - 2008

A key result of a recent literature that focuses on the global consequences of Taylor-type interest rate feedback rules is that such rules in combination with the zero bound on nominal interest rates can lead to unintended liquidity traps. An immediate question posed by this result is whether...

Persistent link: https://www.econbiz.de/10014150342

Monetary Policy with Single Instrument Feedback Rules

Adão, Bernardino; Correia, Isabel H.; Teles, Pedro - 2005

We consider a standard cash in advance monetary model with flexible prices or prices set in advance and show that there are interest rate or money supply rules such that equilibria are unique. The existence of these single instrument rules depends on whether the economy has an infinite horizon...

Persistent link: https://www.econbiz.de/10014067769