Discussions of fiscal policy often originate with central banks. This conference is organized by one; the Bank of England was created to help the British government finance its deficit; and it was in the Federal Reserve Bank of Minneapolis’ Quarterly Review that in 1981, Tom Sargent and Neil Wallace published their well-known article “Some Unpleasant Monetarist Arithmetic.” Their basic proposit...

In this paper Robert Leeson offers what he calls a ‘dynamic framework’ for policy analysis. He uses the term ‘dynamic’ not in any technical sense but, in a sense akin to what McCloskey (1994) called the ‘rhetoric of economics’ – the battle for the hearts and minds of fellow economists and policy-makers. We are introduced to a world of cynical, campaigning and revolutionary scholars, who study s...

We investigate both the rational explosive inflation paths studied by (McCallum 2001), and the classification of fiscal and monetary policies proposed by (Leeper 1991), for stability under learning of the rational expectations equilibria (REE). Our first result is that the fiscalist REE in the model of (McCallum 2001) is not locally stable under learning. In contrast, in the setting of (Leeper ...

System Metaphor is one of the key practices of Extreme Programming (XP). Unfortunately, the System Metaphor practice is poorly understood, and is the practice XP teams most commonly choose to ignore. In this paper, we provide a small collection of patterns that teams can use to develop metaphors for their systems, and for evaluating system metaphors. We hope these patterns will encourage Extrem...

A simple model of monetary/labor search is constructed to exposit and evaluate Keynesian ideas. In the model, economic agents have trouble splitting the surplus from exchange appropriately, and we consider monetary and fiscal policies that correct this Keynesian inefficiency. With either fixed nominal wages and prices, or indeterminacy in rates of exchange, the optimal policies we explore seem ...