IDEAS home Printed from https://ideas.repec.org/a/bla/econom/v65y1998i259p401-427.html
   My bibliography  Save this article

Risk, Optimal Government Finance and Monetary Policies in a Growing Economy

Author

Listed:
  • Earl L. Grinols
  • Stephen J. Turnovsky

Abstract

Optimal tax and monetary policies in a stochastic monetary growth model are investigated. Our findings are of three general types. First, both capital income taxes and monetary growth are shown to influence the economy through effective risk‐adjusted measures, expressed as a linear function of their respective means and variances. Second, two stochastic neutrality results relating to money and bonds, the two nominal assets in the economy, are identified. Third, optimal policy rules relating to taxes, bond finance and money creation are characterized. An essential component of optimal financial policy is a risk‐adjusted balanced budget.

Suggested Citation

  • Earl L. Grinols & Stephen J. Turnovsky, 1998. "Risk, Optimal Government Finance and Monetary Policies in a Growing Economy," Economica, London School of Economics and Political Science, vol. 65(259), pages 401-427, August.
    • Handle: RePEc:bla:econom:v:65:y:1998:i:259:p:401-427
    DOI: 10.1111/1468-0335.00136
    as

    Download full text from publisher

    File URL: https://doi.org/10.1111/1468-0335.00136
    Download Restriction: no
    File URL: https://libkey.io/10.1111/1468-0335.00136?utm_source=ideas
    LibKey link: if access is restricted and if your library uses this service, LibKey will redirect you to where you can use your library subscription to access this item
    ---><---

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. Addie, Ron & Taranto, Aldo, 2024. "Economic Similarities and their Application to Inflation," EconStor Preprints 283286, ZBW - Leibniz Information Centre for Economics.

    More about this item

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:bla:econom:v:65:y:1998:i:259:p:401-427. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    We have no bibliographic references for this item. You can help adding them by using this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Wiley Content Delivery (email available below). General contact details of provider: https://edirc.repec.org/data/lsepsuk.html .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.