Stabilization with fiscal policy

• 成果类型: Article
• 署名作者: Kocherlakota, Narayana R.
• 署名单位: University of Rochester
• 刊物名称: JOURNAL OF MONETARY ECONOMICS
• ISSN/ISSBN: 0304-3932
• DOI: 10.1016/j.jmoneco.2022.07.007
• 发表日期: 2022
• 页码: 1-14
• 关键词: Fiscal policy; stabilization; Heterogeneous agent; New Keynesian

摘要

There is a long-standing consensus view that macroeconomic stabilization should rely on monetary policy, not fiscal policy. This paper reconsiders this view using an analytically tractable heterogeneous agent New Keynesian (HANK) model that is parameterized so as to admit a bubble in public debt. In this context, it is possible to stabilize either inflation or output in response to aggregate shocks by varying only fiscal policy (that is, lump-sum uniform transfers). In contrast, when the public debt bubble is large, it is impossible to stabilize either inflation or output by varying only interest rates (monetary policy).(c) 2022 Elsevier B.V. All rights reserved.