Optimal Fiscal Feedback On Debt In an Economy with Nominal Rigidities
Bibliographic Data
| ID | 9714901 |
|---|---|
| Authors | Tatiana Kirsanova (0000-0002-1470-4311, University of Exeter), Simon Wren‐Lewis (University of Oxford) |
| Year | 2012 |
| Volume | 122 |
| Issue | 559 |
| Pages | 238-264 |
| Publication date | 2012-03-01 |
| Peer Reviewed | Yes |
| Open Access | Yes |
| Type | ARTICLE |
| Venue | The Economic Journal (JOURNAL) |
| Journal identifiers | ISSN: 0013-0133 • E-ISSN: 1468-0297 |
| Publisher | Oxford University Press (OUP) (PUBLISHER) |
| DOI | 10.1111/j.1468-0297.2011.02458.x |
| OpenAlex | W2123113969 |
| Language | EN |
| Citations received | 3 |
| References cited | 24 |
We examine the impact of different degrees of fiscal feedback on debt when monetary policy is determined optimally, rather than following a simple rule. We find the welfare maximising level of fiscal feedback to be small. We show for the first time a clear discontinuity in the behaviour of monetary policy and welfare either side of this optimal level. As fiscal feedback increases, optimal monetary policy becomes less active because fiscal feedback tends to deflate inflationary shocks. If fiscal feedback falls below some critical value, monetary policy becomes strongly passive and this leads to a sharp deterioration in welfare
Debt · Discontinuity (linguistics · Economics · Fiscal policy · Macroeconomics · Monetary economics · Monetary policy · Welfare · Credit Risk and Financial Regulations · Fiscal Policies and Political Economy · Monetary Policy and Economic Impact
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| Unique citing works | 3 |
|---|---|
| Citations per year | 0,27 |
| Citation span | 2015 - 2025 (11) |
| Citation velocity | recent |
| Highly cited | No |
| Citation types | Neutral: 2 |