Creator: Correia, Isabel, Farhi, Emmanuel, Nicolini, Juan Pablo, and Teles, Pedro Series: Working paper (Federal Reserve Bank of Minneapolis. Research Department) Number: 698 Abstract:
When the zero lower bound on nominal interest rates binds, monetary policy cannot provide appropriate stimulus. We show that, in the standard New Keynesian model, tax policy can deliver such stimulus at no cost and in a time-consistent manner. There is no need to use inefficient policies such as wasteful public spending or future commitments to low interest rates.
关键词: Fiscal policy, Zero bound, Sticky prices, and Monetary policy 学科: E62 - Fiscal Policy, E63 - Comparative or Joint Analysis of Fiscal and Monetary Policy; Stabilization; Treasury Policy, E58 - Central Banks and Their Policies, E31 - Price Level; Inflation; Deflation, E40 - Money and Interest Rates: General, and E52 - Monetary Policy
Creator: Chari, V. V. and Kehoe, Patrick J. Series: Working paper (Federal Reserve Bank of Minneapolis. Research Department) Number: 317 Abstract:
This paper examines the limiting behavior of cooperative and noncooperative fiscal policies as countries market power goes to zero. In the first part we provide sufficient conditions for these policies to converge. In the second part we provide examples where these policies diverge. Briefly, we show that if there are unremovable domestic distortions then there can be gains to coordination between countries even when countries have no ability to affect world prices. These results are at variance with the received wisdom in the optimal tariff literature. The key distinction is that we model explicitly the spending decisions of the government while the optimal tariff literature does not.
关键词: Fiscal policy and International economic relations 学科: N10 - Economic History: Macroeconomics and Monetary Economics; Industrial Structure; Growth; Fluctuations: General, International, or Comparative and F42 - International Policy Coordination and Transmission
Creator: Alvarez, Fernando, 1964-, Kehoe, Patrick J., and Neumeyer, Pablo Andrés Series: Working paper (Federal Reserve Bank of Minneapolis. Research Department) Number: 616 Abstract:
Are optimal monetary and fiscal policies time consistent in a monetary economy? Yes, but if and only if under commitment the Friedman rule of setting nominal interest rates to zero is optimal. This result is of applied interest because the Friedman rule is optimal for the standard preferences used in applied work, those consistent with the growth facts.
关键词: Sustainable plans, Maturity structure, Friedman rule, and Time inconsistency
Creator: Bianchi, Javier, Ottonello, Pablo, and Presno, Ignacio Series: Working paper (Federal Reserve Bank of Minneapolis. Research Department) Number: 762 Abstract:
The excess procyclicality of fiscal policy is commonly viewed as a central malaise in emerging economies. We document that procyclicality is more pervasive in countries with higher sovereign risk and provide a model of optimal fiscal policy with nominal rigidities and endogenous sovereign default that can account for this empirical pattern. Financing a fiscal stimulus is costly for risky countries and can render countercyclical policies undesirable, even in the presence of large Keynesian stabilization gains. We also show that imposing austerity can backfire by exacerbating the exposure to default, but a well-designed "fiscal forward guidance" can help reduce the excess procyclicality.
关键词: Procyclicality, Fiscal stabilization policy, and Sovereign default 学科: F44 - International Business Cycles, H50 - National Government Expenditures and Related Policies: General, E62 - Fiscal Policy, F41 - Open Economy Macroeconomics, and F34 - International Lending and Debt Problems
Creator: Miller, Preston J. Series: Working paper (Federal Reserve Bank of Minneapolis. Research Department) Number: 173 描述:
This paper reviews selected studies in the theory of macroeconomic stabilization policy and summarizes their key findings.
关键词: Macroeconomic stabilzation policy, Stabilization theory, and Uncertainty 学科: E63 - Comparative or Joint Analysis of Fiscal and Monetary Policy; Stabilization; Treasury Policy and D80 - Information, Knowledge, and Uncertainty: General
Creator: Cavallo, Michele, Del Negro, Marco, Frame, W. Scott, Grasing, Jamie, Malin, Benjamin A., and Rosa, Carlo Series: Working paper (Federal Reserve Bank of Minneapolis. Research Department) Number: 747 Abstract:
The paper surveys the recent literature on the fiscal implications of central bank balance sheets, with a special focus on political economy issues. It then presents the results of simulations that describe the effects of different scenarios for the Federal Reserve's longer-run balance sheet on its earnings remittances to the U.S. Treasury and, more broadly, on the government's overall fiscal position. We find that reducing longer-run reserve balances from $2.3 trillion (roughly the current amount) to $1 trillion reduces the likelihood of posting a quarterly net loss in the future from 30 percent to under 5 percent. Further reducing longer-run reserve balances from $1 trillion to pre-crisis levels has little effect on the likelihood of net losses.
关键词: Central bank balance sheets, Remittances, and Monetary policy 学科: E59 - Monetary Policy, Central Banking, and the Supply of Money and Credit: Other, E58 - Central Banks and Their Policies, and E69 - Macroeconomic Policy, Macroeconomic Aspects of Public Finance, and General Outlook: Other
Creator: Chari, V. V. and Kehoe, Patrick J. Series: Working paper (Federal Reserve Bank of Minneapolis. Research Department) Number: 589 Abstract:
We show that the desirability of fiscal constraints in monetary unions depends critically on the extent of commitment of the monetary authority. If the monetary authority can commit to its policies, fiscal constraints can only impose costs. If the monetary authority cannot commit, there is a free-rider problem in fiscal policy, and fiscal constraints may be desirable.
关键词: International cooperation, Free riding problem, Time inconsistency, and Growth and stability pact 学科: F31 - Foreign Exchange, E58 - Central Banks and Their Policies, F33 - International Monetary Arrangements and Institutions, E42 - Monetary Systems; Standards; Regimes; Government and the Monetary System; Payment Systems, and F36 - Financial Aspects of Economic Integration