Optimal fiscal and monetary policy under sticky prices
نویسندگان
چکیده
منابع مشابه
Optimal time-consistent monetary and fiscal policy under sticky prices
This paper studies optimal monetary and fiscal policy in a stochastic economy with sticky prices and monopolistic competition on its product markets. Our main objective is to characterize optimal time-consistent (Markov) policies and to compare their characteristics to the ones implemented by a Ramsey policy maker. We perform this comparison within the framework of a stochastic production econo...
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This paper studies optimal fiscal and monetary policy under sticky product prices. The theoretical framework is a stochastic production economy without capital. The government finances an exogenous stream of purchases by levying distortionary income taxes, printing money, and issuing one-period nominally risk-free bonds. The main findings of the paper are: First, for a miniscule degree of price...
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In this paper, I study the properties of the Ramsey equilibrium in a model with distortionary taxation, nominal non-state-contingent debt, and costs of surprise inßation. To do this, I modify the standard cash-credit good economy studied in the optimal policy literature to include sticky prices. With this modiÞcation, the Ramsey planner must balance the shock absorbing beneÞts of surprise inßat...
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A wrong model can lead to a wrong conclusion. The failure to capture inflation dynamics has made the standard New Keynesian framework of monetary policy analysis prone to such a critique. In this paper, we investigate optimal monetary policy using a model that can capture the observed inflation persistence. The model, which we call the dual stickiness model, integrates sticky prices and sticky ...
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We study optimal fiscal and monetary policy in an environment where explicit frictions give rise to valued money, making money essential in the sense that it expands the set of feasible trades. Our main results are in stark contrast to the prescriptions of earlier flexible-price Ramsey models. The two most important findings that emerge from our work are that the Friedman Rule is typically not ...
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ژورنال
عنوان ژورنال: Journal of Economic Theory
سال: 2004
ISSN: 0022-0531
DOI: 10.1016/s0022-0531(03)00111-x