Ramsey Optimal Policy versus Multiple Equilibria with Fiscal and Monetary Interactions

Artikel

We consider a frictionless constant endowment economy based on Leeper (1991). In this economy, it is shown that, under an ad-hoc monetary rule and an ad-hoc fiscal rule, there are two equilibria. One has active monetary policy and passive fiscal policy, while the other has passive monetary policy and active fiscal policy. We consider an extended set-up in which the policy maker minimizes a loss function under quasi-commitment, as in Schaumburg and Tambalotti (2007). Under this formulation there exists a unique Ramsey equilibrium, with an interest rate peg and a passive fiscal policy.

Angaben zum Objekt

• Sprache: Englisch

Verweise und Beziehungen

• Erschienen in: Journal: Economics Bulletin ; ISSN: 1545-2921 ; Volume: 40 ; Year: 2020 ; Issue: 1 ; Pages: 140-147 ; AccessEcon LLC

Klassifikation und Themen

• Klassifikation: Wirtschaft ; Monetary Policy ; Central Banks and Their Policies ; Comparative or Joint Analysis of Fiscal and Monetary Policy; Stabilization; Treasury Policy ; Fiscal Policy
• Thema: Fiscal theory of the price level ; Ramsey optimal policy ; Frictionless endowment economy ; Interest rate rule ; Fiscal rule

Beteiligte, Orts- und Zeitangaben

• Ereignis: Geistige Schöpfung
• (wer): Chatelain, Jean-Bernard ; Ralf, Kirsten
• Ereignis: Veröffentlichung
• (wann): 2020

Weitere Informationen

• Handle: http://hdl.handle.net/10419/213806
• Letzte Aktualisierung: 10.03.2025, 11:42 MEZ