The design of monetary and fiscal policy: A global perspective

• 成果类型: Article
• 署名作者: Benhabib, J; Eusepi, S
• 署名单位: New York University; Federal Reserve System - USA; Federal Reserve Bank - New York
• 刊物名称: JOURNAL OF ECONOMIC THEORY
• ISSN/ISSBN: 0022-0531
• DOI: 10.1016/j.jet.2005.01.001
• 发表日期: 2005
• 页码: 40-73
• 关键词: Taylor rules; fiscal policy; multiple equilibria; global dynamics

摘要

We study the emergence of multiple equilibria in models with capital and bonds under various monetary and fiscal policies. We show that the presence of capital is indeed another independent source of local and global multiplicities, even under active policies that yield local determinacy. We also show how a very similar mechanism generates multiplicities in models with bonds and distortionary taxation. We then explore the design of monetary policies that avoid multiple equilibria. We show that interest rate policies that respond to the output gap, while potentially a source of significant inefficiencies, may be effective in preventing multiple equilibria and costly oscillatory equilibrium dynamics. (c) 2005 Elsevier Inc. All rights reserved.