Designing fiscal and monetary institutions in a second-best world
AbstractThis paper explores how fiscal and monetary policy interact if commitment and access to lump-sum taxation are limited. We analyze how equilibrium outcomes for inflation, employment, and public spending are affected by the structural features of an economy, such as money holdings, outstanding public debt, labor-market distortions, society s preferences, and the nature of the policy game. In a normative vein, we compare society s welfare across various institutional settings and investigate how society should optimally adjust the preferences of policymakers.
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Bibliographic InfoPaper provided by Tilburg University, Center for Economic Research in its series Discussion Paper with number 1995-47.
Date of creation: 1995
Date of revision:
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Web page: http://center.uvt.nl
Central Banks; Monetary Policy; Fiscal Policy; Independence; monetary economics;
Other versions of this item:
- Beetsma, Roel M. W. J. & Lans Bovenberg, A., 1997. "Designing fiscal and monetary institutions in a second-best world," European Journal of Political Economy, Elsevier, vol. 13(1), pages 53-79, February.
- Beetsma, R.M.W.J. & Bovenberg, A.L., 1997. "Designing fiscal and monetary institutions in a second best world," Open Access publications from Tilburg University urn:nbn:nl:ui:12-74437, Tilburg University.
- E62 - Macroeconomics and Monetary Economics - - Macroeconomic Policy, Macroeconomic Aspects of Public Finance, and General Outlook - - - Fiscal Policy
- E52 - Macroeconomics and Monetary Economics - - Monetary Policy, Central Banking, and the Supply of Money and Credit - - - Monetary Policy
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- Rogoff, Kenneth, 1985. "The Optimal Degree of Commitment to an Intermediate Monetary Target," The Quarterly Journal of Economics, MIT Press, vol. 100(4), pages 1169-89, November.
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Working Papers in Applied Economic Theory
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- Carl E Walsh, 1993. "Optimal contracts for independent central bankers: private information, performance measures and reappointment," Proceedings, Federal Reserve Bank of San Francisco, issue Mar.
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