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This paper demonstrates how time consistency of the Ramsey policy - the optimal fiscal and monetary policy under commitment - can be achieved. Each government should leave its successor with a unique maturity structure for the nominal and indexed debt, such that the marginal benefit of a...
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order to stabilize the real economy. A modified Taylor curve, the forecast Taylor curve, showing the tradeoff between the … achieved an efficient stabilization of both inflation and the real economy and what relative weight on the stability of … inflation and the real economy has effectively been applied. Ex ante evaluation may be more relevant than evaluation ex post …
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This paper compares fiscal cyclicality across advanced and developing countries, geographic regions as well as income levels over 1960–2016 period, then identifies factors that explain countries' government spending and tax-policy cyclicality. Public debt/tax base ratio provides a more robust...
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