Corsetti, Giancarlo; Kuester, Keith; Müller, Gernot J. - Banco Central de Chile - 2011
According to conventional wisdom, fiscal policy is more effective under a fixed exchange rate regime than under a …, showing that the long-term real interest rate necessarily rises if inflation rises on impact, in response to an increase in … floating exchange rates, the conventional wisdom needs to be qualified. Under plausible medium-term fiscal policies, government …