Fiscal Foundations of Monetary Regimes
نویسنده
چکیده
Fiscal considerations and commitment drive the choice of monetary policy regime, especially for developing countries. I survey the fiscal foundations of price determination, and study the maximize-inflation-tax, interest rate rule, peg and currency board, and dollarization regime. Since nominal debt acts like equity for the government, the dollarization question is like the question whether a firm should choose debt vs. equity finance.
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