This paper studies price stability and debt sustainability when the real rate exceeds trend growth (r g) in a New Keynesian model with endogenous technology growth through R&D. Endogenous growth constitutes a self-financing mechanism for deficits which backs debt and attenuates fiscal...

The research employs Bayesian Vector Autoregressions with hierarchical priors to analyze the intricate economic implications of fiscal policy shocks on inflation, monetary policy, and fiscal authorities in the context of South Africa. The study explores data spanning from 1979 to 2022. Contrary...

We study a model in which policy aims at aggregate price stability. A fiscal imbalance materializes that, if uncorrected, must cause inflation, but the imbalance may get corrected in the future with some probability. By maintaining price stability in the near term, monetary policy can buy time...