Fiscal Policy Restrictions on Inflation Targeting
A Political Economy Approach
Bibliographic Data
| ID | 6167042 |
|---|---|
| Authors | Hernando Vargas-Herrera (0000-0001-6634-4736, Banco de la República Colombia), Hernando Vargas, Yanneth Rocío Betancourt-García (0009-0009-9854-6717, Banco de la República Colombia), Betancourt Yanneth Rocío |
| Year | 2010 |
| Issue | 65 |
| Pages | 171-190 |
| Publication date | 2010-01-01 |
| Open Access | Yes |
| Type | ARTICLE |
| Venue | Revista Desarrollo y Sociedad (JOURNAL) |
| Journal identifiers | ISSN: 0120-3584 • E-ISSN: 1900-7760 |
| Publisher | Universidad de los Andes (PUBLISHER • VE) |
| DOI | 10.13043/dys.65.6 |
| OpenAlex | W2103830896 |
| Language | EN |
| References cited | 2 |
Fiscal policy may impose restrictions on Inflation Targeting when Central Bank Independence (CBI) is institutionally weak and society has a real exchange rate target that is highly valued. In this environment, fiscal policy constrains the decisions of a committed, independent Central Bank (CB) regarding inflation. When such a pressure is strong enough to threaten cbi, monetary authorities react by setting an inflation target that differs from the one that would prevail in the absence of those threats. A simple model is used to illustrate this point where the CB takes into account the probability of survival as an independent institution
Central bank · Economics · Exchange rate · Fiscal policy · Independence (probability theory · Inflation (cosmology · Inflation targeting · Macroeconomics · Monetary economics · Monetary policy · Point (geometry · Political science · Politics · Fiscal Policies and Political Economy · Global Financial Crisis and Policies · Monetary Policy and Economic Impact
| Highly cited | No |
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