Optimal fiscal and monetary policy under sticky prices

• 成果类型: Article
• 署名作者: Schmitt-Grohé, S; Uribe, M
• 署名单位: University of Pennsylvania; National Bureau of Economic Research; Rutgers University System; Rutgers University New Brunswick
• 刊物名称: JOURNAL OF ECONOMIC THEORY
• ISSN/ISSBN: 0022-0531
• DOI: 10.1016/S0022-0531(03)00111-X
• 发表日期: 2004
• 页码: 198-230
• 关键词: Optimal fiscal and monetary policy; sticky prices; optimal inflation volatility; Tax smoothing

摘要

This paper studies optimal fiscal and monetary policy under sticky product prices. The theoretical framework is a stochastic production economy. The government finances an exogenous stream of purchases by levying distortionary income taxes, printing money, and issuing nominal non-state-contingent bonds. The main findings of the paper are: First, for a miniscule degree of price stickiness (i.e., many times below available empirical estimates) the optimal volatility of inflation is near zero. Second, small deviations from full price flexibility induce near random walk behavior in government debt and tax rates. Finally, price stickiness induces deviation from the Friedman rule. (C) 2003 Elsevier Science (USA). All rights reserved.