Stiglitz versus the IMF on the Asian debt crisis: an intertemporal model with real exchange rate overshooting
In: Discussion paper series 6318
In: International macroeconomics
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In: Discussion paper series 6318
In: International macroeconomics
In: Discussion paper series 4433
In: International macroeconomics
In: The economic journal: the journal of the Royal Economic Society, Band 128, Heft 609, S. 710-727
ISSN: 1468-0297
In: Journal of economic dynamics & control, Band 37, Heft 3, S. 649-665
ISSN: 0165-1889
In: The economic journal: the journal of the Royal Economic Society, Band 122, Heft 559, S. 238-264
ISSN: 1468-0297
In: Mathematical social sciences, Band 122, S. 1-6
In: Journal of Monetary Economics, Band 92, S. 96-111
SSRN
Working paper
The fiscal policy environment central banks operate in can be radically different with respect to debt levels, maturity structures and whether or not fiscal adjustments are spendingor tax-based. Despite this, most analyses of monetary policy delegation schemes typically ignore the behavior of the fiscal policy maker. This paper investigates whether delegating either nominal income or price level targets to a monetary authority yields social gains in an economy with government debt, where the fiscal policymaker, acting strategically, may support or undermine the policies of the central bank. We argue that the fiscal environment plays an important role in determining the performance of monetary policy. The gains to price level targeting typically found in the literature can be overturned at empirically relevant debt-to-GDP ratios, when debt stabilization is achieved through spending cuts. In contrast these gains are retained if the fiscal authorities utilize taxes to respond to shocks and stabilize debt.
BASE
The fiscal policy environment central banks operate in can be radically different with respect to debt levels, maturity structures and whether or not fiscal adjustments are spending- or tax-based. Despite this, most analyses of monetary policy delegation schemes typically ignore the behavior of the fiscal policy maker. This paper investigates whether delegating either nominal income or price level targets to a monetary authority yields social gains in an economy with government debt, where the fiscal policymaker, acting strategically, may support or undermine the policies of the central bank. We argue that the fiscal environment plays an important role in determining the performance of monetary policy. The gains to price level targeting typically found in the literature can be overturned at empirically relevant debt-to-GDP ratios, when debt stabilization is achieved through spending cuts. In contrast these gains are retained if the fiscal authorities utilize taxes to respond to shocks and stabilize debt.
BASE
SSRN
Working paper
SSRN
Working paper
In: The economic journal: the journal of the Royal Economic Society, Band 119, Heft 541, S. F482-F496
ISSN: 1468-0297
In: The economic journal: the journal of the Royal Economic Society, Band 116, Heft 512, S. F208-F231
ISSN: 1468-0297
In: CESifo Working Paper No. 10941
SSRN