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There have been attempts to resurrect the fiscal theory of the price revel (FTPL). The original FTPL rests on a fundamental compounded fallacy: confusing the intertemporal budget constraint (IBC) of the State, holding with equality and with sovereign bonds priced at their contractual values,...
Persistent link: https://www.econbiz.de/10011732317
In this paper we examine some of the issues which will arise if the European Central Bank adopts "direct inflation" targeting after the adoption of the single currency in Europe. One issue is how big the deviations in national inflation rates form the European average might be. Another is the...
Persistent link: https://www.econbiz.de/10005744312
The original Keynesian paradigm differs from the Neoclassical Synthesis and even more so from the New-Keynesian approach. In this paper, a modern framework for the original Keynesian paradigm is presented. It will highlight the key elements of the paradigm. A model is developed to determine...
Persistent link: https://www.econbiz.de/10010314657
The implementation of economic reforms under new economic policies in India was associated with a paradigmatic shift in monetary and fiscal policy. While monetary policies were solely aimed at "price stability" in the neoliberal regime, fiscal policies were characterized by the objective of...
Persistent link: https://www.econbiz.de/10010513081
The Bank of Japan permitted a ten-year period of deflation (1995-2005) which appears to have ended in 2006. The deflation, as well as the preceding disinflation, adversely affected the financial and real sectors of the economy that in turn, made it difficult to recover from the collapse of asset...
Persistent link: https://www.econbiz.de/10005426906
In spite of elaborate descriptive and correlational studies, the most ubiquitous phenomenon in economics, namely inflation, has remained unexplained in terms of its mathematical origins. Keynes had attempted to relate inflation to a mechanism of "sticky wages and prices". Hitherto, such theories...
Persistent link: https://www.econbiz.de/10005412616
Most prices and interest rates display fluctuating levels that embody extractable energy and equivalent amounts of money. Such fluctuations are also associated with varying degrees of uncertainty. Shannon's derivations of spectral entropy and information content offer computational techniques...
Persistent link: https://www.econbiz.de/10005561278
This paper considers a central bank with a zero inflation target and a fiscal authority with a differing objective. Examples using calibrated models explore the consequences of the fiscal authority being aware of the central bank's objective. Situations in which the fiscal authority is able to...
Persistent link: https://www.econbiz.de/10005458685
This paper analyzes how monetary policy in an overlapping generations model can be designed to avoid inflationary consequences of anticipated changes of monetary policies. Avoiding these inflationary consequences will require a once and for all increase (decrease) in monetary growth immediately...
Persistent link: https://www.econbiz.de/10005596786
Persistent link: https://www.econbiz.de/10005509928