The fiscal theory of the price level with a bubble

Markus Brunnermeier, Sebastian Merkel, Yuliy Sannikov

This paper incorporates a bubble term in the standard FTPL equation to explain why countries with persistently negative primary surpluses can have a positively valued currency and low inﬂation. It also provides an example with closed-form solutions in which idiosyncratic risk on capital returns depresses the interest rate on government bonds below the economy's growth rate.

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Year of publication:	May 2020
Authors:	Brunnermeier, Markus Konrad ; Merkel, Sebastian ; Sannikov, Yuliy
Publisher:	Munich, Germany : CESifo, Center for Economic Studies & Ifo Institute
Subject:	primary surplus \| Preistheorie \| Price theory \| Finanzwissenschaft \| Public economics \| Öffentliche Schulden \| Public debt \| Zins \| Interest rate \| Realzins \| Real interest rate \| Wirtschaftswachstum \| Economic growth \| Theorie \| Theory

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Extent:	1 Online-Ressource (circa 22 Seiten) Illustrationen
Series:	CESifo working papers. - München : [Verlag nicht ermittelbar], ISSN 2364-1428, ZDB-ID 2065232-X. - Vol. no. 8278 (2020)
Type of publication:	Book / Working Paper
Type of publication (narrower categories):	Graue Literatur ; Non-commercial literature ; Arbeitspapier ; Working Paper
Language:	English
Other identifiers:	hdl:10419/217029 [Handle]
Classification:	E44 - Financial Markets and the Macroeconomy ; E52 - Monetary Policy (Targets, Instruments, and Effects) ; E63 - Comparative or Joint Analysis of Fiscal and Monetary Policy; Stabilization
Source:	ECONIS - Online Catalogue of the ZBW

Persistent link: https://www.econbiz.de/10012213139