Fiscal policy in a monetarist model
In a model which exhibits many monetarist properties it is shown that monetary and fiscal policies must be coordinated. The model is populated by overlapping generations of three-period lived agents who can hold fiat money, fiat bonds, and physical capital. A government produces a public good and issues both money and fiat bonds to finance permanent budget deficits. In this model both fiat money and fiat bonds can have value in equilibrium, and their co-existence can allow a more efficient financing of deficits than can a single debt instrument.
|Date of creation:||1982|
|Date of revision:|
|Contact details of provider:|| Postal: 90 Hennepin Avenue, P.O. Box 291, Minneapolis, MN 55480-0291|
Phone: (612) 204-5000
Web page: http://minneapolisfed.org/
More information through EDIRC
|Order Information:||Web: http://www.minneapolisfed.org/pubs/|
References listed on IDEAS
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.:
- John Bryant & Neil Wallace, 1980. "A suggestion for further simplifying the theory of money," Staff Report 62, Federal Reserve Bank of Minneapolis.
When requesting a correction, please mention this item's handle: RePEc:fip:fedmsr:67. See general information about how to correct material in RePEc.
For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Jannelle Ruswick)
If references are entirely missing, you can add them using this form.