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We describe a simple mechanism that generates inflation persistence in a standard sticky-price model of optimal fiscal and monetary policy. Key to this mechanism is that policies are decided under discretion. The government's discretionary incentive to erode the real value of nominal public debt...
Persistent link: https://www.econbiz.de/10011081515
We describe a simple mechanism that generates inflation persistence in a standard sticky-price model of optimal fiscal and monetary policy. Key to this mechanism is that policies are implemented under discretion. The government's discretionary incentive to erode the real value of nominal public...
Persistent link: https://www.econbiz.de/10010871012
We examine the dynamic properties of inflation in a model of optimal discretionary fiscal and monetary policies. The lack of commitment and the presence of nominally risk-free debt provide the government with an incentive to implement policies which induce positive and persistent inflation...
Persistent link: https://www.econbiz.de/10008579084
Persistent link: https://www.econbiz.de/10010682789
We study the monetary instrument problem in a model of optimal discretionary fiscal and monetary policy. The policy problem is cast as a dynamic game between the central bank, the fiscal authority, and the private sector. We show that, as long as there is a conflict of interest between the two...
Persistent link: https://www.econbiz.de/10008457152
Persistent link: https://www.econbiz.de/10010152296
Persistent link: https://www.econbiz.de/10010100476
We study the monetary instrument problem in a model of optimal discretionary fiscal and monetary policy. The policy problem is cast as a dynamic game between the central bank, the fiscal authority, and the private sector. We show that, as long as there is a conflict of interest between the two...
Persistent link: https://www.econbiz.de/10003951467
Persistent link: https://www.econbiz.de/10010227230
Persistent link: https://www.econbiz.de/10009740455