different policy regimes considered. In particular: (i) both in the long run and in short run equilibrium, a greater inflation … becomes more active as the fraction of liquidity constrained agents increases; (iii) optimal discretionary policies imply … welfare losses for Ricardian, while liquidity constrained consumers experience welfare gains with respect to Ramsey. …

policy games. We find that the distributional conflict due to limited asset market participation rises the inflation bias … inflation bias. However, the latter is cancelled at the cost of strongly reducing the Ricardian welfare in terms of consumption … equivalents. A partial redistributive fiscal policy is able to reduce the inflation bias, but generates a strong Government bias …

different policy regimes considered. In particular: (i) both in the long run and in short run equilibrium, a greater inflation … becomes more active as the fraction of liquidity constrained agents increases; (iii) optimal discretionary policies imply … welfare losses for Ricardian, while liquidity constrained consumers experience welfare gains with respect to Ramsey. …

This paper shows that Limited Asset Market Participation generates an extra inflation bias when the fiscal and the … monetary authority play strategically. A fully redistributive fiscal policy eliminates the extra inflation-bias, however, the …, reduces the inflation-bias, but rises Government spending. Despite a fully conservative monetary policy is necessary to get …

and the short run equilibrium require a departure from zero inflation rate; (ii) in response to a markup shock, fiscal … policy becomes more aggressive as the fraction of liquidity constrained agents increases and price stability is no longer … optimal even under Ramsey; (iii) overall, optimal discretionary policies imply welfare losses for Ricardians, while liquidity …

debt matters. For example, it determines whether news of future deficits implies current inflation or future inflation …. When long-term debt is present, the government can trade current inflation for future inflation by debt operations; this … variance of inflation. I find cases in which long-term debt helps to stabilize inflation, and I find that the optimal inflation …

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 …