The indeterminacy of prices under interest rate pegging: The non-Ricardian case

Cushing, Matthew J.

doi:10.1016/s0304-3932(99)00012-4

Cited by 41 publications

(31 citation statements)

References 17 publications

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“…Intuitively, for small levels of debt the wealth effect is also small and the parameter region consistent with Det(J) > 0 is close to the combinations of active and passive policy-making underlying Figure 2. 16 As b rises the wealth effect becomes relatively more important, leading to changes in the steady state levels of c, k, r and, hence, also in σ 0 , σ 1 , and σ 2 . We show that there exist unique threshold values τ 1 ∈ (g, τ * ) ⇒ b 1 ∈ (0, b * ) which lead to a change in the sign pattern of σ 0 , σ 1 , and σ 2 .…”

Section: Efficient Steady Statesmentioning

confidence: 98%

“…Figures 3(a) and (b) reveal that this interaction is very non-linear. In particular, the two regimes, as graphed in Figures 3(a) and 3(b), have the feature that there always exist regions of the parameter space which are necessary for locally determinate dynamics at 'low debt' steady states, 16 Specifically, assuming non-Ricardian consumers, it is easy to check within (30) that in the special caseof of b = 0 one eigenvalue of J is given by r − f F . Hence, f F = r implies Det(J) = 0, similar to Figure 2.…”

Section: Efficient Steady Statesmentioning

confidence: 99%

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Monetary and fiscal policy interactions in a New Keynesian model with capital accumulation and non-Ricardian consumers

Leith

Thadden

2008

Journal of Economic Theory

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Standard-Nutzungsbedingungen:Die Dokumente auf EconStor dürfen zu eigenen wissenschaftlichen Zwecken und zum Privatgebrauch gespeichert und kopiert werden.Sie dürfen die Dokumente nicht für öffentliche oder kommerzielle Zwecke vervielfältigen, öffentlich ausstellen, öffentlich zugänglich machen, vertreiben oder anderweitig nutzen.Sofern die Verfasser die Dokumente unter Open-Content-Lizenzen (insbesondere CC-Lizenzen) zur Verfügung gestellt haben sollten, gelten abweichend von diesen Nutzungsbedingungen die in der dort genannten Lizenz gewährten Nutzungsrechte. www.econstor.eu Terms of use: Documents in WO R K I N G PA P E R S E R I E SN O 6 4 9 / J U N E 2 0 0 6 MONETARY AND FISCAL POLICY INTERACTIONS IN A NEW KEYNESIAN MODEL WITH CAPITAL ACCUMULATION AND NON-RICARDIAN CONSUMERS and Leopold von Thadden by Campbell LeithIn 2006 all ECB publications will feature a motif taken from the €5 banknote. WO R K I N G PA P E R S E R I E S N O 6 4 9 / J U N E 2 0 0 6This paper can be downloaded without charge from http://www.ecb.int or from the Social Science Research Network electronic library at http://ssrn.com/abstract_id=908620 policy" (Helsinki, 2004), and at the annual meetings of the Econometric Society (Madrid, 2004) C O N T E N T S Abstract 4Non-technical summary 5

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Section: Efficient Steady Statesmentioning

confidence: 98%

Section: Efficient Steady Statesmentioning

confidence: 99%

Monetary and fiscal policy interactions in a New Keynesian model with capital accumulation and non-Ricardian consumers

Leith

Thadden

2008

Journal of Economic Theory

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“…Hence it is the government's inter-temporal budget constraint that determines the price level. 7 This view, though, has been criticised on theoretical grounds (Buiter (1997), McCallum (1997) and Cushing (1999)), and has found mixed empirical support. For instance, Canzoneri et al (2001) conclude that post-war US data are more consistent with a regime where monetary policy, and not fiscal policy, determines the price level.…”

Section: The Government Budget Constraint and Monetary Policymentioning

confidence: 99%

How does Fiscal Policy Affect Monetary Policy in Emerging Market Countries?

Zoli

2005

SSRN Journal

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This publication is available on the BIS website (www.bis.org).© Bank for International Settlements 2005. All rights reserved. Brief excerpts may be reproduced or translated provided the source is cited. AbstractThis paper analyses how fiscal policy affects monetary policy in emerging economies. First, it conducts a test for fiscal dominance, and finds that the evidence points clearly to a regime of fiscal dominance in the case of Argentina and Brazil during the 1990s and early 2000s, while for the other countries in the sample the results are mixed. Next, the paper evaluates whether monetary policy accommodates fiscal policy, by assessing whether fiscal variables enter significantly in the central bank's reaction function. The findings indicate that in the emerging markets under consideration the conduct of monetary policy is not directly affected by changes in real primary balances. Then, the paper explores another mechanism through which fiscal policy could affect monetary policy in an emerging economy, by looking at the impact of fiscal policy on country premium and exchange rates. The empirical analysis is conducted through an event study, assessing the impact of news concerning fiscal variables and fiscal policy, on sovereign spread and exchange rate daily movements in Brazil, during the period surrounding the 2002 macroeconomic crisis. The results show that fiscal events have significantly influenced sovereign spreads and exchange rates in that period. Furthermore, fiscal policy actions appear to have contributed to movements in the exchange rates more than unanticipated monetary policy manoeuvres. The findings also suggest that, at that time, fiscal policy might have pushed the economy into an equilibrium in which increases in the policy intervention rate were likely to be associated with a depreciation, rather than an appreciation of the exchange rate.

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“…Pour Woodford (1996) et Beetsma et Bovenberg (1999), la seule façon de limiter la volatilité des prix est alors de définir des règles budgétaires et des plafonds d'endettement garantissant l'équilibre des finances publiques et la soutenabilité de la dette publique, permettant ainsi d'immuniser la banque centrale des pressions inflationnistes du gouvernement. La théorie fiscale des prix a toutefois reçu un accueil très mitigé, et nombre d'auteurs se sont attachés à en montrer les limites (Cushing (1999) …”

Section: Introductionunclassified

Banque Centrale Et Politique Budgetaire : Une Évidence Empirique Pour La Zone CEMAC

Dessy-Karl

Kamajou

Gilbert

2018

ESJ

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The purpose of this article is to analyze how the degree of independence of the Bank of Central African States (BEAC) influences the level of budget deficit for the countries of the Economic and Monetary Community of Africa Centrale (CEMAC) over the period 1994-2016. To do this, we rely on the statutory and rotational indicators of central bank governors developed by the literature, as well as on the econometrics of panel data. The results of the estimates indicate a mixed relationship between degree of independence and level of budget deficit. This result can be interpreted as an absence of constraint on fiscal policy, or as the partial assumption of cyclical stabilization by the central bank even when it is independent. It can also be interpreted as an absence of obligation for the budgetary policy to take charge of the cyclical adjustment. These results nevertheless confirm that the average orientation of fiscal policy is determined more by the budget procedure itself than by the statutes and the government of BEAC. 191 rotation des gouverneurs de banques centrales développés par la littérature, ainsi que sur l'économétrie des données de panels. Les résultats des estimations indiquent une relation mitigée entre degré d'indépendance et niveau de déficit budgétaire. Ce résultat peut s'interpréter comme une absence de contrainte sur la politique budgétaire, ou comme la prise en charge partielle de la stabilisation conjoncturelle par la banque centrale même lorsque celle-ci est indépendante. Il peut aussi s'interpréter comme une absence d'obligation pour la politique budgétaire de prendre en charge le réglage conjoncturel. Ces résultats confirment néanmoins que l'orientation moyenne de la politique budgétaire est davantage déterminée par la procédure budgétaire elle-même que par les statuts et la gouvernement de la BEAC.

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The indeterminacy of prices under interest rate pegging: The non-Ricardian case

Cited by 41 publications

References 17 publications

Monetary and fiscal policy interactions in a New Keynesian model with capital accumulation and non-Ricardian consumers

Monetary and fiscal policy interactions in a New Keynesian model with capital accumulation and non-Ricardian consumers

How does Fiscal Policy Affect Monetary Policy in Emerging Market Countries?

Banque Centrale Et Politique Budgetaire : Une Évidence Empirique Pour La Zone CEMAC

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