Faraglia, Elisa; Marcet, Albert; Scott, Andrew - C.E.P.R. Discussion Papers - 2014
We show how to model portfolio models in the presence of long bonds. Specifically we study optimal fiscal policy under …, fiscal policy is secondary to debt management. Modelling optimal policy with long term bonds is computationally demanding … properties of solutions across these three approaches and examine how the properties of optimal fiscal policy differ in the case …