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Understanding Inflation as a Joint Monetary-Fiscal Phenomenon

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  • Eric M. Leeper
  • Campbell Leith

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 article concludes with directions in which theoretical and empirical developments may go. The article is prepared for the Handbook of Macroeconomics, volume 2 (John B. Taylor and Harald Uhlig, editors, Elsevier Press).

Suggested Citation

  • Eric M. Leeper & Campbell Leith, 2016. "Understanding Inflation as a Joint Monetary-Fiscal Phenomenon," NBER Working Papers 21867, National Bureau of Economic Research, Inc.
  • Handle: RePEc:nbr:nberwo:21867
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    as
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    Blog mentions

    As found by EconAcademics.org, the blog aggregator for Economics research:
    1. Inflation and Fiscal Policy
      by Steve Cecchetti and Kim Schoenholtz in Money, Banking and Financial Markets on 2016-09-12 18:01:59

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    Cited by:

    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. Guo, Lingyi & Xu, Wenli & Xu, Kun, 2016. "中国财政政策调整的宏观经济效应——基于消费者异质性的新凯恩斯模型
      [The effect of Fiscal Consolidations on Chinese Maroeconomies——Based on The NK Model with Cosummer’s Heterogenicity]
      ," MPRA Paper 69170, University Library of Munich, Germany.
    4. 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.
    5. repec:eee:macchp:v2-2185 is not listed on IDEAS
    6. Perevyshin, Yuri (Перевышин, Юрий), 2017. "Peculiarities of Interaction of Monetary and Fiscal Policy Under the Inflation Targeting Regime
      [Особенности Взаимодействия Денежно-Кредитной И Фискальной Политики При Режиме Инфляционного Таргетир
      ," Working Papers 031711, Russian Presidential Academy of National Economy and Public Administration.
    7. Leeper, Eric M. & Li, Bing, 2017. "Surplus–debt regressions," Economics Letters, Elsevier, vol. 151(C), pages 10-15.
    8. Gibbs, Christopher G., 2018. "Learning to believe in secular stagnation," Economics Letters, Elsevier, vol. 163(C), pages 50-54.
    9. Bai, Yuting & Kirsanova, Tatiana & Leith, Campbell, 2017. "Nominal targeting in an economy with government debt," European Economic Review, Elsevier, vol. 94(C), pages 103-125.
    10. repec:eee:ecolet:v:164:y:2018:i:c:p:46-49 is not listed on IDEAS
    11. Moises S. Andrade & Tiago Berriel, 2016. "Is There an Output Free Lunch for Fiscal Inationary Policies?," Textos para discussão 650, Department of Economics PUC-Rio (Brazil).
    12. repec:eee:ecolet:v:156:y:2017:i:c:p:133-137 is not listed on IDEAS
    13. repec:eee:eecrev:v:95:y:2017:i:c:p:62-83 is not listed on IDEAS
    14. Stephen S. Poloz, 2016. "The Doug Purvis Memorial Lecture—Monetary/Fiscal Policy Mix and Financial Stability: The Medium Term Is Still the Message," Discussion Papers 16-13, Bank of Canada.

    More about this item

    JEL classification:

    • E31 - Macroeconomics and Monetary Economics - - Prices, Business Fluctuations, and Cycles - - - Price Level; Inflation; Deflation
    • E52 - Macroeconomics and Monetary Economics - - Monetary Policy, Central Banking, and the Supply of Money and Credit - - - Monetary Policy
    • E58 - Macroeconomics and Monetary Economics - - Monetary Policy, Central Banking, and the Supply of Money and Credit - - - Central Banks and Their Policies
    • E61 - Macroeconomics and Monetary Economics - - Macroeconomic Policy, Macroeconomic Aspects of Public Finance, and General Outlook - - - Policy Objectives; Policy Designs and Consistency; Policy Coordination
    • E62 - Macroeconomics and Monetary Economics - - Macroeconomic Policy, Macroeconomic Aspects of Public Finance, and General Outlook - - - Fiscal Policy
    • E63 - Macroeconomics and Monetary Economics - - Macroeconomic Policy, Macroeconomic Aspects of Public Finance, and General Outlook - - - Comparative or Joint Analysis of Fiscal and Monetary Policy; Stabilization; Treasury Policy

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