Non-Ricardian fiscal policies in an open monetary union

  • 27 Pages
  • 0.89 MB
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by
European Commission, Directorate-General for Economic and Financial Affairs , Brussels
Statementby Javier Andrés, Fernando Ballabriga, and Javier Vallés.
SeriesEconomic papers / European Commission -- no.169, Economic papers -- no.169.
ContributionsBallabriga, Fernando., Vallés, Javier., European Commission. Directorate-General for Economic and Financial Affairs.
The Physical Object
Pagination27p. :
ID Numbers
Open LibraryOL19935237M

This paper investigates the importance of fiscal policy in providing macroeconomic stabilization in a monetary union. We use a microfounded New Keynesian model of a monetary union, which incorporates persistence in inflation and non-Ricardian consumers, and derive optimal simple rules for fiscal authorities.

We find that fiscal policy can play an important role in reacting to inflation, output. This chapter highlights the role of the money supply and the exchange rate in an open economy aggregate demand-oriented model of fiscal and monetary policy, including analysis of fiscal versus.

This paper investigates the importance of?scal policy in providing macroeconomic stabilisation in a monetary union. We use a microfounded New Keynesian model of a monetary union which incorporates persistence in in?ation and non-Ricardian consumers, and derive optimal simple rules for.

Fiscal Policy Effectiveness and Neutrality Results in a Non-Ricardian World in a monetary union Non-Ricardian fiscal policies in an open monetary union book the fiscal stance of one country will be reflected in changes in the real economy of the Author: Carsten Detken.

I investigate the relevance of a fiscal regime for disinflation in new EU member states (NMS).

Details Non-Ricardian fiscal policies in an open monetary union EPUB

I generalize the framework of [Obstfeld, M., Rogoff, K. Cited by: 7. Leeper, E.M. () Equilibria under “Active” and “Passive” Monetary and Fiscal Policies.

Journal of Monetary Economics, 27, Jan 15,  · Fiscal Policy ECO/ Fiscal Policy In the current economic recession, the United States’ fiscal policy has placed unrest and instability among the population.

The positive and negative outcomes of the fiscal policy, with regard to the country’s deficit, surplus, and debt, have different effects on how many different people and organizations view the current economy, make decisions, and.

Jump to Content Jump to Main Navigation. Home About us Subjects Contacts About us Subjects Contacts. Dec 22,  · Testing the fiscal theory of price level in case of Pakistan. Link/Page Citation () Fiscal Solvency and Price Level Determination in a Monetary Union.

Journal of Monetary Economics 1, He argues that Brazilian economy is subject to fiscal or non-Ricardian policies combined by active monetary policy rules resulting in. Apr 13,  · The authors highlight that the U.S., by adopting a very expansionary monetary policy earlier, was able to benefit from a depreciating U.S.

Dollar (USD), but this changed after when both Europe and Japan embarked also in a more expansionary unconventional monetary policies. Due to a non-Ricardian treatment of public finances, there is a. "The Design of Optimal Fiscal Rules for Europe after ," (with Giancarlo Corsetti), in Adjustment and Growth in the European Monetary Union, Francisco Torres and Francesco Giavazzi (eds.), Cambridge University Press, Jun 03,  · Monetary policy under the Conservative government from to would be a clear example: monetary targets gave way to exchange rate targets which gave way to inflation targeting (see Cobham, ).

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Fiscal policy under the Labour government of – does not Cited by: 8. The interaction between monetary and fiscal policies in Turkey: The interaction between monetary and fiscal policies in Turkey: An estimated New Keynesian DSGE model Inflation persistence in the Euro area before and after the European Monetary Union.

Meller, B. / Nautz, D. | print version. Sep 01,  · This article poses the question of whether monetary financing of public investment constitutes a viable way forward for the euro area. The problems of low inflation, high unemployment and public debts seem scarcely resolvable in an environment that is constrained by the virtual exhaustion of monetary policy and legal limitations on expansionary fiscal agnesescriva.com by: 1.

Consequently, to maintain an austere monetary policy, it is necessary that the monetary union member countries follow equally austere fiscal policies.

For this reason, the European Monetary Union established the Stability and Growth Pact with the objective of monitoring and guaranteeing the fiscal stability of union member countries (Box ).

Jun 15,  · In a non-Ricardian model more public debt issuance would also contribute to increase interest rates. There are also additional factors of a secular nature which have altered the balance between savings and investment and as a result, weighed on the real interest rate.

Non-ricardian fiscal policies in an open monetary union. Brussels: European Commission. Directorate General for Economic and Financial Affairs (DG ECFIN). Ballabriga Clavería, F.

& Martínez Mongay, C. Has EMU shifted policy?. Brussels: European Commission. Directorate General for Economic and Financial Affairs (DG ECFIN).

This book offers an introductory step-by-step course in Dynamic Stochastic General Equilibrium (DSGE) modelling. Modern macroeconomic analysis is increasingly concerned with the construction, calibration and/or estimation and simulation of DSGE agnesescriva.com by: 1.

A common monetary authority chooses inflation for the union, also without commitment. We first describe the existence of a fiscal externality that arises in the presence of limited commitment and leads countries to over borrow; this externality rationalizes the imposition of debt ceilings in a monetary union.

(CREI Senior Researcher, UPF Professor (on leave) and Barcelona GSE Research Professor). Abstract: We propose an integrated treatment of the problems of optimal monetary and fiscal policy, for an economy in which prices are sticky (so that the supply-side effects of tax changes are more complex than in standard fiscal analyses) and the only available sources of government revenue are distorting taxes (so that the fiscal.

The aim of the Working Papers series is to disseminate research papers on economics and finances by Banco de España researchers. The Working Papers are published once they have successfully come through an anonymous evaluation process.

Through their publication, the Banco de España seeks to contribute to the economic analysis and knowledge of the Spanish economy and its international context. The latest Tweets from Esa Jokivuolle (@EsaJokivuolle).

Head of Research, Bank of FinlandFollowers: This study describes the Mark III version of MULTIMOD, the IMF's multi region macroeconomic model. Mark III version of MULTIMOD differs from its predecessor in several important respects. New features include a core steady-state analogue model, a new model of teh inflation-unemployment nexus, and extended non-Ricardian specification of consumption-saving behavior, and improved specifications.

The model’s multiple non-Ricardian features, nominal and real rigidities, and fiscal and monetary policy reaction functions help produce plausible macroeconomic responses to changes in fiscal and monetary policy, as well as their spillover across economies, and is widely used to conduct policy analysis in IMF flagship publications.

Apr 15,  · The authors highlight that the U.S., by adopting a very expansionary monetary policy earlier, was able to benefit from a depreciating U.S.

Description Non-Ricardian fiscal policies in an open monetary union PDF

Dollar (USD), but this changed after when both Europe and Japan embarked also in a more expansionary unconventional monetary policies. Due to a non-Ricardian treatment of public finances, there is a Author: Vítor Constâncio. As an academic I have worked in economic theory, and with models of applied and empirical economic analysis, and have applied what I have learned to a range of “live” policy problems – most often in the area of fiscal and monetary policies, their interactions and impact on the economy – both in and, more often, out of Scotland.

DSGE Models in Macroeconomics: Estimation, Evaluation and New Developments - Ebook written by Nathan Balke, Fabio Canova, Fabio Milani, Mark Wynne, Carter Hill, Tom Fomby.

Read this book using Google Play Books app on your PC, android, iOS devices. Download for offline reading, highlight, bookmark or take notes while you read DSGE Models in Macroeconomics: Estimation, Evaluation and Author: Nathan Balke. ii) (Ir-)relevance results for open-market operations at the zero lower bound in mon-etary unions iii) Ramsey-optimal policies and monetary-–scal determinants of the price level iv) Revisiting Mundell: Strategic –scal policy in a monetary union, joint with Stefan Niemann (University of Essex).

The economy’s resource constraint then determines c. There may also be steady-state equilibria in which m is changing over time.

Reis () investigated how monetary policies that allow the monetary stock to be timevarying can alter the steady-state values of consumption and capital. The Great Recession of revived interest in the role of fiscal policy, and there has been an increase of studies in the literature evaluating the stabilizing role of government spending and taxes, especially in the context of ineffective monetary policy due to the zero lower bound on nominal interest agnesescriva.com: Rozina Shaheen.Publications by Author: Ivan Werning The constrained efficient risk sharing arrangement can be implemented by contingent transfers within a fiscal union.

The benefits of such a fiscal union are larger, the bigger the asymmetric shocks affecting the members of the currency union, the more persistent these shocks, and the less open the member.ESRC Grant () £50, (£34, for Dr. C. Leith) for research on “Interactions Between Monetary and Fiscal Policy” joint with Simon Wren-Lewis (University of Exeter.