Similar Search Results

Distortionary Taxation, Debt, and the Price Level

Thadden, Leopold von; Schabert, Andreas - 2021

This paper considers the nominal and real determinacy of equilibria under an exogenously specified path of interest rates in an economy in which taxation is either lump-sum or distortionary. Under lump-sum taxation, we confirm the well-known finding that equilibria display nominal (in)...

Persistent link: https://www.econbiz.de/10013318109

Monetary Conservatism and Fiscal Policy

Adam, Klaus - 2006

Does an inflation conservative central bank agrave; la Rogoff (1985) remain desirable in a setting with endogenous … spending. The optimal inflation rate internalizing this distortion is positive, but lack of monetary commitment robustly … generates too much inflation. A conservative monetary authority thus remains desirable. Exclusive focus on inflation by the …

Persistent link: https://www.econbiz.de/10012779800

Monetary and Fiscal Policy Interactions in a New Keynesian Model with Capital Accumulation and Non-Ricardian Consumers

Leith, Campbell B.; Thadden, Leopold von - 2021

This paper develops a small New Keynesian model with capital accumulation and government debt dynamics. The paper discusses the design of simple monetary and fiscal policy rules consistent with determinate equilibrium dynamics in the absence of Ricardian equivalence. Under this assumption,...

Persistent link: https://www.econbiz.de/10013317567

Debt Stabilizing Fiscal Rules

Michel, Philippe; Thadden, Leopold von; Vidal, Jean-Pierre - 2021

Unstable government debt dynamics can typically be corrected by various fiscal instruments, like appropriate adjustments in government spending, public transfers, or taxes. This paper investigates properties of state-contingent debt targeting rules which link stabilizing budgetary adjustments...

Persistent link: https://www.econbiz.de/10013318110

Assessing the Fiscal-Monetary Policy Mix in the Euro Area

Bańkowski, Krzysztof; Christoffel, Kai; Faria, Thomas - 2021

reaching favourable macroeconomic outcomes (i.e. recovering pandemic output losses and bringing inflation close to the ECB …

Persistent link: https://www.econbiz.de/10013312080

Post-Covid Fiscal Rules : A Central Bank Perspective

Hauptmeier, Sebastian; Leiner-Killinger, Nadine; … - 2022

expenditure growth targets which take account of the ECB’s symmetric 2% inflation target can improve the cyclical properties of … the framework. Fiscal policy would be tighter when inflation is above the target but looser when inflation is below target … inflation environment would enable monetary policy to operate more effectively especially in the vicinity of the effective lower …

Persistent link: https://www.econbiz.de/10013297106

Inflation Forecasts, Monetary Policy and Unemployment Dynamics : Evidence from the Us and the Euro Area

Ciccarelli, Matteo - 2007

This paper explores the role that inflation forecasts play in the uncertainty surrounding the estimated effects of … alternative monetary rules on unemployment dynamics in the euro area and the US. We use the inflation forecasts of 8 competing … relative to the different inflation models under two rules. The results suggest that model uncertainty can be a serious issue …

Persistent link: https://www.econbiz.de/10012777870

Lack of Confidence, the Zero Lower Bound, and the Virtue of Fiscal Rules

Schmidt, Sebastian - 2015

In the presence of the zero lower bound, standard business cycle models with a Taylor-type monetary policy rule are prone to equilibrium multiplicity. A drop in confidence can drive the economy into a liquidity trap without any change in fundamentals. Using a prototypical sticky-price model, I...

Persistent link: https://www.econbiz.de/10013020664

Fiscal Rules, Fiscal Space and Procyclical Fiscal Policy

Nerlich, Carolin - 2019

In this paper we analyse the interaction of fiscal rules and fiscal space. We find strong evidence for fiscal rules being associated with higher fiscal space. Furthermore, the analysis shows that countries with more fiscal space tend to have higher discretionary expenditures, but that this...

Persistent link: https://www.econbiz.de/10012867815

Designing QE in a Fiscally Sound Monetary Union

Bletzinger, Tilman - 2018

This paper develops a tractable model of a monetary union with a sound fiscal governance structure and shows how in such environment the design of monetary policy above and at the lower bound constraint on short-term interest rates can be linked to well-known findings from the literature dealing...

Persistent link: https://www.econbiz.de/10012917169