Detail Interactions between monetary and fiscal policy in an open economy Bibliografi Author: Mikek, Peter ; Leeper, Eric M. (Advisor) Topik: ECONOMICS; GENERAL|ECONOMICS; FINANCE Bahasa: (EN )    ISBN: 0-599-44518-1     Penerbit: Indiana University     Tahun Terbit: 1999     Jenis: Theses - Dissertation Fulltext: 9942875.pdf (0.0B; 1 download) Abstract The relationship between fiscal and monetary policy is a very important determinant of the price level in an economy. I seek to explain its relevance for the determination of the price level and nominal exchange rate in an open economy. I use a two-country world model that incorporates dynamic responses of monetary and fiscal policy to the state of the economy. I simulate impulse responses to the stochastic shocks to nominal interest rate and lump-sum taxes. In the first part of the dissertation, I show that both fiscal and monetary policy affect the price level and exchange rate in an open economy. In particular, when fiscal policy is strongly reactive to outstanding debt, Ricardian equivalence obtains. However, when the monetary authority collects an inflation tax, a fiscal policy shock affects the dynamics of inflation and consumption. Monetary contraction causes an increase in future inflation and depreciation of national currency when the monetary authority does not respond strongly to inflation. In the second part, I study the relevance of policy interactions for international transmission of policy shocks. I find that both the existence and the magnitude of transmission depend on the chosen policy regime. When the monetary authority responds to changes in exchange rate, the basic results continue to hold, but the dynamics of impulse responses change. The last part is devoted to the economic reforms in New Zealand. I interpret them within the framework of the fiscal theory of the price level. I argue that strict inflation targeting instituted at the beginning of the decade was both possible and successful because of the switch in fiscal regime. I present historical evidence and simulation results that support the claim. Opini Anda Klik untuk menuliskan opini Anda tentang koleksi ini! Lihat Sejarah Pengadaan  Konversi Metadata   Kembali

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