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Understanding Inflation as a Joint Monetary–Fiscal Phenomenon

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  • Leeper, E.M.
  • Leith, C.

Abstract

We develop the theory of price-level determination in a range of models using both ad hoc policy rules and jointly optimal monetary and fiscal policies and discuss empirical issues that arise when trying to identify monetary–fiscal regime. The chapter concludes with directions in which theoretical and empirical developments may go.

Suggested Citation

  • Leeper, E.M. & Leith, C., 2016. "Understanding Inflation as a Joint Monetary–Fiscal Phenomenon," Handbook of Macroeconomics, Elsevier.
  • Handle: RePEc:eee:macchp:v2-2305
    DOI: 10.1016/bs.hesmac.2016.03.012
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    1. repec:ijc:ijcjou:y:2018:q:2:a:5 is not listed on IDEAS
    2. Ricardo Reis, 2016. "Can the Central Bank Alleviate Fiscal Burdens?," NBER Working Papers 23014, National Bureau of Economic Research, Inc.
    3. Tatiana Kirsanova & Celsa Machado & Ana Paula Ribeiro, 2018. "Should the ECB Coordinate EMU Fiscal Policies?," International Journal of Central Banking, International Journal of Central Banking, vol. 14(2), pages 237-280, June.
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    More about this item

    Keywords

    Monetary policy; Fiscal policy; Price level determination; Optimal policy; Tax smoothing; Government debt; E4; E5; E6; H3; H6;

    JEL classification:

    • E4 - Macroeconomics and Monetary Economics - - Money and Interest Rates
    • E5 - Macroeconomics and Monetary Economics - - Monetary Policy, Central Banking, and the Supply of Money and Credit
    • E6 - Macroeconomics and Monetary Economics - - Macroeconomic Policy, Macroeconomic Aspects of Public Finance, and General Outlook
    • H3 - Public Economics - - Fiscal Policies and Behavior of Economic Agents
    • H6 - Public Economics - - National Budget, Deficit, and Debt

    Statistics

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