The fiscal myth of the price level

• 成果类型: Article
• 署名作者: Niepelt, D
• 署名单位: Stockholm University
• 刊物名称: QUARTERLY JOURNAL OF ECONOMICS
• ISSN/ISSBN: 0033-5533
• DOI: 10.1162/003355304772839597
• 发表日期: 2004
• 页码: 277-300
• 关键词: monetary-policy; asset prices; Determinacy

摘要

I examine the fiscal theory of the price level according to which non-Ricardian policy and predetermined nominal government debt fiscally determine prices. I argue that the non-Ricardian policy assumption and, by implication, fiscal price level determination are inconsistent with an equilibrium in which all asset holdings reflect optimal household choices. In such an equilibrium, policy must be Ricardian even if, in some states of nature, the government defaults or commits to an arbitrary real primary surplus sequence. I propose an alternative to the fiscal theory of the price level, based on nominal flows instead of nominal stocks. While this alternative framework establishes a consistent link between fiscal policy and the price level, it does not introduce inflationary fiscal effects beyond those suggested by Sargent and Wallace.