Optimal Time-Consistent Monetary, Fiscal and Debt Maturity Policy

• 成果类型: Article
• 署名作者: Leeper, Eric M.; Leith, Campbell; Liu, Ding
• 署名单位: University of Virginia; National Bureau of Economic Research; University of Glasgow; Southwestern University of Finance & Economics - China
• 刊物名称: JOURNAL OF MONETARY ECONOMICS
• ISSN/ISSBN: 0304-3932
• DOI: 10.1016/j.jmoneco.2020.03.015
• 发表日期: 2021
• 关键词: New Keynesian model; government debt; monetary policy; fiscal policy; Time Consistency Policy; Maturity Structure

摘要

The textbook optimal policy response to an increase in government debt is simple- monetary policy should actively target inflation, and fiscal policy should smooth taxes while ensuring debt sustainability. Such policy prescriptions presuppose an ability to commit. Without that ability, the temptation to use inflation surprises to offset monopoly and tax distortions, as well as to reduce the real value of government debt, creates a state-dependent inflationary bias problem. High debt levels and short-term debt exacerbate the inflation bias. But this produces a debt stabilization bias because the policy maker wishes to deviate from the tax smoothing policies typically pursued under commitment, by returning government debt to steady-state. As a result, the response to shocks in New Keynesian models can be radically different, particularly when government debt levels are high and maturity short. (C) 2020 Elsevier B.V. All rights reserved.