In this paper we investigate a delegation game in which the underling situation is represented by a standard Bertrand price competition. In contrast to Fershtman, Judd, and Kalai ([1987], hereafter FJK), we employ a weakly undominated SPNE as the equilibrium concept based on Shino [2012] and...

In this paper we study delegation environments based on Fershtman, Judd, and Kalai ([1987], hereafter FJK). By imposing a certain assumption on the notion of implementability, called implementability with mutually rational agents, they show that every efficient outcome can be fully implemented...

Drumetz and Pfister (2021) make several claims about the inadequacy and fallacies of Modern Money Theory (MMT) and conclude that MMT is nothing more than a political manifesto; there are no theoretical and empirical foundations behind it. This paper addresses this last point by focusing on the...

This article addresses Japan's economy, its new economic policy package, which is known as Abenomics. The centerpiece of Abenomics has been the three "economic arrows" targeted at aggressive monetary policy, flexible fiscal policy, and growth strategy. This article focuses on Abenomics and shows...

Households' and firms' subjective inflation expectations play a central role in macroeconomic and intertemporal microeconomic models. We discuss how subjective inflation expectations are measured, the patterns they display, their determinants, and how they shape households' and firms' economic...

The paper analyses the reasons for Japan's persistently low inflation since the bursting of the Japanese bubble economy (low inflation conundrum). It is shown that Japan experienced a structural break from a high-growth period with relatively high inflation to a low-growth period with...

The study investigates the level of coordination between the fiscal and monetary authorities in the WAMZ countries and its implications for the attainment of the inflation and fiscal deficit criteria. To achieve this objective, the study utilizes the Set Theoretic Approach (STA) and the vector...

We build and estimate a novel TANK model with partially unfunded debt to study whether the record high debt-to-GDP ratio threatens US inflation stability. In response to business cycle shocks, the monetary authority controls inflation, and the fiscal authority stabilizes debt. The central bank...

Global inflation has risen sharply from its lows in mid-2020, on rebounding global demand, supply bottlenecks, and soaring food and energy prices, especially since the Russian Federation's invasion of Ukraine. Markets expect inflation to peak in mid-2022 and then decline, but to remain elevated...

The theory and practice of stabilization policy has taken many turns as it evolved over the past century, oscillating between high hopes and deep skepticism regarding the capacity - and desirability - of governments taking responsibility for macroeconomic stability. This paper reviews the...