Some pleasant monetarist arithmetic
AbstractContrary to the conclusion of Sargent and Wallace, it is possible to exogenously and independently vary monetary and fiscal policy and retain steady-state equlibrium in economies like the United States. In particular,the central bank is not forced to monetize increased deficits either now or in the future. This conclusion is based on the fact that the real after-tax yield on government bonds is considerably less than the growth rate of real income except during brief disinflationary periods.
Download InfoIf you experience problems downloading a file, check if you have the proper application to view it first. In case of further problems read the IDEAS help page. Note that these files are not on the IDEAS site. Please be patient as the files may be large.
Bibliographic InfoArticle provided by Federal Reserve Bank of Minneapolis in its journal Quarterly Review.
Volume (Year): (1984)
Issue (Month): Spr ()
Other versions of this item:
Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:
- Preston J. Miller, 1983. "Budget deficit mythology," Quarterly Review, Federal Reserve Bank of Minneapolis, issue Fall.
- Darby, Michael R, 1975. "The Financial and Tax Effects of Monetary Policy on Interest Rates," Economic Inquiry, Western Economic Association International, vol. 13(2), pages 266-76, June.
- David, Paul A & Scadding, John L, 1974. "Private Savings: Ultrarationality, Aggregation, and "Denison's Law."," Journal of Political Economy, University of Chicago Press, vol. 82(2), pages 225-49, Part I, M.
- White, Betsy Buttrill, 1978. "Empirical Tests of the Life Cycle Hypothesis," American Economic Review, American Economic Association, vol. 68(4), pages 547-60, September.
- Darby, Michael R. & Lothian, James R., 1983.
"British economic policy under margaret thatcher: A midterm examination,"
Carnegie-Rochester Conference Series on Public Policy,
Elsevier, vol. 18(1), pages 157-207, January.
- Michael R. Darby & James R. Lothian, 1982. "British Economic Policy Under Margaret Thatcher: A Midterm Examination," UCLA Economics Working Papers 253, UCLA Department of Economics.
- Barro, Robert J., 1974.
"Are Government Bonds Net Wealth?,"
3451399, Harvard University Department of Economics.
- Laurence J. Kotlikoff & Lawrence H. Summers, 1980.
"The Role of Intergenerational Transfers in Aggregate Capital Accumulation,"
NBER Working Papers
0445, National Bureau of Economic Research, Inc.
- Kotlikoff, Laurence J & Summers, Lawrence H, 1981. "The Role of Intergenerational Transfers in Aggregate Capital Accumulation," Journal of Political Economy, University of Chicago Press, vol. 89(4), pages 706-32, August.
- Thomas J. Sargent & Neil Wallace, 1981. "Some unpleasant monetarist arithmetic," Quarterly Review, Federal Reserve Bank of Minneapolis, issue Fall.
- Plosser, Charles I., 1982. "Government financing decisions and asset returns," Journal of Monetary Economics, Elsevier, vol. 9(3), pages 325-352.
- James Tobin & Willem H. Buiter, 1974. "Long Run Effects of Fiscal and Monetary Policy on Aggregate Demand," Cowles Foundation Discussion Papers 384, Cowles Foundation for Research in Economics, Yale University.
- Blinder, Alan S. & Solow, Robert M., 1973. "Does fiscal policy matter?," Journal of Public Economics, Elsevier, vol. 2(4), pages 319-337.
Blog mentionsAs found by EconAcademics.org, the blog aggregator for Economics research:
- Why the Cost of the Bailout Doesnâ??t Matter, part 1
by knzn in Economics and ... on 2008-09-21 15:14:00
- Bhattacharya, Joydeep & Haslag, Joseph, 1999.
"Monetary Policy Arithmetic: Some Recent Contributions,"
Staff General Research Papers
10388, Iowa State University, Department of Economics.
- Joydeep Bhattacharya & Joseph H. Haslag, 1999. "Monetary policy arithmetic: some recent contributions," Economic and Financial Policy Review, Federal Reserve Bank of Dallas, issue Q III, pages 26-36.
- Daniel L. Thornton, 2010.
"Monetizing the debt,"
Federal Reserve Bank of St. Louis.
- Alpha C. Chiang & Stephen M. Miller, 1998.
"The Perception of Government Bonds and Money as Net Wealth: An Integrated Approach,"
1998-05, University of Connecticut, Department of Economics.
- Alpha C. Chiang & Stephen M. Miller, 1998. "The Perception of Government Bonds and Money as Net Wealth: An Integrated Approach," Eastern Economic Journal, Eastern Economic Association, vol. 24(4), pages 435-448, Fall.
- Patricia S. Pollard, 1993. "Central bank independence and economic performance," Review, Federal Reserve Bank of St. Louis, issue Jul, pages 21-36.
- Thomas J. Finn, 1988. "A Note on the Real Federal Deficit," Eastern Economic Journal, Eastern Economic Association, vol. 14(3), pages 263-270, Jul-Sep.
- Richard G. Sheehan, 1985. "The federal reserve reaction function: does debt growth influence monetary policy?," Review, Federal Reserve Bank of St. Louis, issue Mar, pages 24-33.
- Peter J. Stemp & William M. Scarth, . "Zero Inflation Targets: Central Bank Commitment and Fiscal Policy Outcomes," Computing in Economics and Finance 1996 _055, Society for Computational Economics.
- S. Rao Aiyagari, 1985. "Deficits, interest rates, and the tax distribution," Quarterly Review, Federal Reserve Bank of Minneapolis, issue Win.
- Steven Russell & Marco Espinosa, 1990. "The inflationary effects of the use of reserve ratio reductions, or open market purchases, to reduce market interest rates: a theoretical comparison," Working Papers 1990-006, Federal Reserve Bank of St. Louis.
- Giovanni Di Bartolomeo & Debora Di Gioacchino, 2008. "Fiscal-monetary policy coordination and debt management: a two-stage analysis," Empirica, Springer, vol. 35(4), pages 433-448, September.
- Marco Espinosa-Vega & Steven Russell, 2001. "Stability of steady states in a model of pleasant monetarist arithmetic," Working Paper 2001-20, Federal Reserve Bank of Atlanta.
- Giovanni Di Bartolomeo & Debora Di Gioacchino, 2005. "Fiscal-Monetary Policy Coordination And Debt Management: A Two Stage Dynamic Analysis," Macroeconomics 0504024, EconWPA.
- Marco Espinosa-Vega & Steven Russell, 1998. "The long-run real effects of monetary policy: Keynesian predictions from a neoclassical model," Working Paper 98-6, Federal Reserve Bank of Atlanta.
- José Ramalho, 1990. "The steady-state budget constraint and the integration of european financial markets: an arithmetical exercise," BIS Working Papers 14, Bank for International Settlements.
For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Janelle Ruswick).
If references are entirely missing, you can add them using this form.