A central feature of the monetarist approach to the problem of inflation is a preannounced gradual reduction in monetary growth. This reduction is to be sustained until a monetary growth consistent with a zero, or acceptably low, target rate of inflation is reached. Thereafter, monetary growth...

We study the consequences of non-neutrality of government debt for macroeconomic stabilization policy in an environment where prices are sticky. Assuming transaction services of government bonds, Ricardian equivalence fails because public debt has a negative impact on its marginal rate of return...

A standard model of activist macroeconomic policy derives a monetary reaction rule by assuming that governments have performance objectives, but are constrained by an augmented Phillips curve. In addition to monetary policy governments apply a variety of instruments to influence inflation and...