3 edition of Optimal fiscal and monetary policy, and economic growth found in the catalog.
Bibliography: leaf [29-30]
|Statement||by Duncan K. Foley, Karl Shell [and] Miguel Sidrauski|
|Series||M.I.T. Dept. of Economics. Working paper -- no. 21, Working paper (Massachusetts Institute of Technology. Dept. of Economics) -- no. 21.|
|Contributions||Shell, Karl, Sidrauski, Miguel|
|The Physical Object|
|Pagination||, 28,  leaves|
|Number of Pages||28|
supply. Thus, monetary policy plays a stabilizing role in influencing economic growth through a number of channels. However, the scope of such a role may be limited by the concurrent pursuit of other primary objectives of monetary policy, the nature of monetary policy transmission mechanism, and by other factors, including theFile Size: 12KB. When the economy is near its fiscal limit, a transitory monetary policy contraction leads to a sustained rise in inflation, even though monetary policy actively targets inflation and fiscal policy.
Downloadable! Author(s): V. V. Chari & Patrick J. Kehoe. Abstract: We provide an introduction to optimal fiscal and monetary policy using the primal approach to optimal taxation. We use this approach to address how fiscal and monetary policy should be set over the long run and over the business cycle. We find four substantive lessons for policymaking: . Abstract. The paper analyses the way in which monetary and fiscal policy influences the performances of economic growth. The analysis is made on the basis of a dynamic model with discrete variables of the Sidrauski- Brock type, with infinite-lived households and money in the utility by: 1.
Both monetary and fiscal policy are maroeconomic tools used to manage or stimulate the economy. Monetary policy addresses interest rates and the supply of money in circulation, and it is generally Author: Troy Segal. fiscal policy is thought to stifle economic growth by distor ting the effect of tax and inefficient government spending. In the light of debate the question that comes to the fore is what h as.
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Optimal Fiscal and Monetary Policy and Economic Growth Duncan K. Foley, Karl Shell, and Miguel Sidrauski Massachusetts Institute of Technology 1. Introduction There have been two broad strategic approaches to the study of economic growth. The first, exemplified by Solow's paper (), attempts to explain.
Full text of "Optimal fiscal and monetary policy, and economic growth" See other formats AUG 21V DEWEY LIBRARY Optimal Fiscal and Monetary Policy, and Economic Growth by Duncan K. Foley Karl Shell Miguel Sidrauski Number 21 - April tEconomics. 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 consequences of monetary policy must be considered Cited by: If the adjustment occurs through the income tax rate, the optimal monetary growth rate involves a Phelps-type tradeoff between the income tax rate and the inflation tax rate.
The framework is suited for analyzing optimal macroeconomic policy in general and the latter part of the paper considers an optimal monetary-fiscal by: 1. Journal of Economic Dynamics and Control Vol DecemberPages Optimal fiscal and monetary policy with occasionally binding zero bound constraints.
"Fiscal policy and economic growth: An empirical investigation," Journal of Monetary Economics, Elsevier, vol. Optimal fiscal and monetary policy, pagesDecember.
William Easterly & Sergio Rebelo, " Fiscal Policy and Economic Growth: An Empirical And economic growth book NBER Working PapersNational Bureau of Economic Research, Inc.
Optimal Fiscal and Monetary Policy V. Chari, Patrick J. Kehoe. NBER Working Paper No. Issued in January NBER Program(s):Economic Fluctuations and Growth Program We provide an introduction to optimal fiscal and monetary policy using the primal approach to optimal taxation.
This paper is an application of the theory of optimal taxation to the study of aggregative fiscal and monetary policy. Our analysis is squarely in the neoclassical, welfare-economic tradition stemming from Ramsey’s () contribution., so it will be useful to File Size: 3MB.
Optimal Monetary Policy Aubhik Khan, Robert G. King, Alexander L. Wolman. NBER Working Paper No. Issued in December NBER Program(s):Economic Fluctuations and Growth Optimal monetary policy maximizes the welfare of a representative agent, given frictions in the economic environment.
From monetary to real Cyclical properties 4. Conclusion References Abstract We provide an introduction to optimal fiscal and monetary policy using the primal approach to optimal taxation. We use this approach to address how fiscal and monetary policy should be set over the long run and over the business by: Optimal Monetary and Fiscal Policy: A Linear-Quadratic Approach Pierpaolo Benigno, Michael Woodford.
Chapter in NBER book NBER Macroeconomics AnnualVolume 18 (), Mark Gertler and Kenneth Rogoff, editors (p. - ) Conference held AprilPublished in July by The MIT PressCited by: the optimal monetary policy is expansionary and not contractionary as the F riedman rule would suggest.
As in our setting, lump-sum taxes that fund the contraction are imposed symmetrically on. Optimal Monetary and Fiscal Policy: A Linear Quadratic Approach Pierpaolo Benigno, Michael Woodford. NBER Working Paper No. Issued in August NBER Program(s):Economic Fluctuations and Growth, Monetary Economics We propose an integrated treatment of the problems of optimal monetary and fiscal policy, for an economy in which prices are sticky Cited by: In this paper, we study Ramsey-optimal fiscal and monetary policy in a medium-scale model of the U.S.
business cycle. The model features a rich array of real and nominal rigidities that have been identified in the recent empirical literature as salient in explaining observed aggregate fluctuations. The main result of the paper is that price stability appears to be a central goal of optimal Cited by: Download Citation | Optimal Economic Growth Using Fiscal and Monetary Policies | The literature on growth theory is rich with models attempting to explain growth.
Summary of Fiscal Policy, Investment, and Economic Growth Investment in physical capital, human capital, and new technology is essential for long-term economic growth, as Table summarizes.
In a market-oriented economy, private firms will undertake most of the investment in physical capital, and fiscal policy should seek to avoid a long. Optimal monetary policy must be counter-cyclical in response to both technology and public spending shocks, yet the intensity of the reaction crucially depends on the presence of an R&D sector.
However, the small amount of short-run deviations of prices from the non-zero trend inflation observed in response to shocks suggests inflation. Monetary policy rests on the relationship between the rates of interest in an economy, that is the price at which money can be borrowed, and the total supply of money.
Monetary policy uses a variety of tools to control one or both of these, to influence outcomes like economic growth, inflation, exchange rates with other currencies and Size: KB.
The idea that the budget should always be in balance actually runs counter to optimal fiscal policy in an advanced, dynamic economy like ours.
Instead, smart fiscal policy must be flexible, with deficits temporarily rising in recessions to support the weak economy and coming down in recoveries as the economy strengthens.
We study in this article how the conduct of fiscal policy interacts with the choice of optimal monetary rules by a central bank. We consider a non-Ricardian model with nondistortionary fiscal policies, and compare two policy packages, one where fiscal and monetary policies are simultaneously optimized, and one where monetary policy is optimized under a given fiscal by:.
Books embody the Institute's most serious and sustained research on a full range of issues. Our books are also the product of the most thorough peer review process, including critiques solicited from specialists outside the Institute who may remain anonymous, as is traditional for leading academic presses.The book explores whether fiscal policies can secure full employment without inflation, one of the key questions in economics after Keynes.
Part 1, General Theory of Public Finance and Fiscal Policy, discusses Ends and Means in economic policy. The results of this ends-means analysis are applied to fiscal policy.
Part 2, Microeconomics, deals with the impact of fiscal measures .Consistent with the results presented above, the optimal policy package has a constant stock of nominal fiat money (g, = = 1) and a zero nominal interest rate.
A.B. Abel, Optimal monetary growth not capture the quid pro quo nature of an open market purchase or of monetization of a deficit, the interpretation of monetary policy is somewhat Cited by: