Optimal Fiscal Feedback on Debt in an Economy with Nominal Rigidities

• 成果类型: Article
• 署名作者: Kirsanova, Tatiana; Wren-Lewis, Simon
• 署名单位: University of Exeter; University of Oxford
• 刊物名称: ECONOMIC JOURNAL
• ISSN/ISSBN: 0013-0133
• DOI: 10.1111/j.1468-0297.2011.02458.x
• 发表日期: 2012
• 页码: 238-264
• 关键词: monetary-policy; public debt; MODEL; rules; uncertainty

摘要

We examine the impact of different degrees of fiscal feedback on debt when monetary policy is determined optimally, rather than following a simple rule. We find the welfare maximising level of fiscal feedback to be small. We show for the first time a clear discontinuity in the behaviour of monetary policy and welfare either side of this optimal level. As fiscal feedback increases, optimal monetary policy becomes less active because fiscal feedback tends to deflate inflationary shocks. If fiscal feedback falls below some critical value, monetary policy becomes strongly passive and this leads to a sharp deterioration in welfare.