Active, or passive? Revisiting the role of fiscal policy in the Great Inflation

Konferenzbeitrag

We revisit the question whether U.S. fiscal policy in the pre-Volcker period was active or passive. To determine the policy stance, we estimate a DSGE model with monetary and fiscal policy interactions employing a sequential Monte Carlo algorithm (SMC) for posterior evaluation. In contrast to previous studies, we do not have to treat the different policy regimes as distinct models, which have to be estimated separately. Instead, the SMC enables us to estimate the DSGE model over its entire parameter space to determine the prevailing policy mix. Our findings attribute the leading role to the fiscal authority, while the monetary authority accommodated its actions. For active monetary/passive fiscal policy, or passive monetary/passive fiscal policy we find no evidence in the data.

Angaben zum Objekt

• Sprache: Englisch

Verweise und Beziehungen

• Erschienen in: Series: Beiträge zur Jahrestagung des Vereins für Socialpolitik 2019: 30 Jahre Mauerfall - Demokratie und Marktwirtschaft - Session: Applied Macroeconometrics I ; No. A13-V3

Klassifikation und Themen

• Klassifikation: Wirtschaft ; Bayesian Analysis: General ; Statistical Simulation Methods: General ; Comparative or Joint Analysis of Fiscal and Monetary Policy; Stabilization; Treasury Policy ; Studies of Particular Policy Episodes
• Thema: Bayesian Analysis ; DSGE Models ; Monetary-Fiscal Policy Interactions ; Monte Carlo Methods

Beteiligte, Orts- und Zeitangaben

• Ereignis: Geistige Schöpfung
• (wer): Ettmeier, Stephanie ; Kriwoluzky, Alexander
• Ereignis: Veröffentlichung
• (wer): ZBW - Leibniz-Informationszentrum Wirtschaft
• (wo): Kiel, Hamburg
• (wann): 2019

Weitere Informationen

• Handle: http://hdl.handle.net/10419/203609
• Letzte Aktualisierung: 10.03.2025, 11:42 MEZ