Welfare Improving Coordination of Fiscal and Monetary Policy

Result code in IS VaVaI
<a href="https://www.isvavai.cz/riv?ss=detail&h=RIV%2F49777513%3A23520%2F11%3A43898963" target="_blank" >RIV/49777513:23520/11:43898963 - isvavai.cz</a>
Result on the web
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DOI - Digital Object Identifier
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Result language
angličtina
Original language name
Welfare Improving Coordination of Fiscal and Monetary Policy
Original language description
Should independent monetary and fiscal policies coordinate their actions and/or targets? To examine this question the paper considers a simple reduced-form model in which monetary and fiscal policies are formally independent, but still interdependent?through their mutual spillovers. The analysis shows that the medium-run equilibrium levels of inflation, deficit, and output depend on the two policies? (i) potency (elasticity of output with respect to the policy instruments), (ii) ambition (the level of their output target), and (iii) conservatism (inflation vs. output volatility aversion). What matters is however the relative degrees of these characteristics across the two policies rather than the absolute degrees for each policy. This implies that coordination of monetary and fiscal policy is superior to non-cooperative Nash behaviour. In particular, we find that ambition-coordination is more important than conservatism-coordination in terms of avoiding medium-run imbalances due to a t
Czech name
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Czech description
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Type
J<sub>x</sub> - Unclassified - Peer-reviewed scientific article (Jimp, Jsc and Jost)
CEP classification
AH - Economics
OECD FORD branch
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Publication year
2011
Confidentiality
S - Úplné a pravdivé údaje o projektu nepodléhají ochraně podle zvláštních právních předpisů

Name of the periodical
Acta Universitatis Carolinae Oeconomica - Czech Economic Review
ISSN
1802-4696
e-ISSN
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Volume of the periodical
5
Issue of the periodical within the volume
1
Country of publishing house
CZ - CZECH REPUBLIC
Number of pages
20
Pages from-to
7-26
UT code for WoS article
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EID of the result in the Scopus database
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