Simple Monetary Rules Under Fiscal Dominance /

Is aggressive monetary policy response to inflation feasible in countries that suffer from fiscal dominance? We find that if nominal interest rates are allowed to respond to government debt, even aggressive rules that satisfy the Taylor principle can produce unique equilibria. However, resulting inf...

Fuld beskrivelse

Bibliografiske detaljer
Hovedforfatter: Kumhof, Michael
Andre forfattere: Nunes, Ricardo, Yakadina, Irina
Format: Tidsskrift
Sprog:English
Udgivet: Washington, D.C. : International Monetary Fund, 2007.
Serier:IMF Working Papers; Working Paper ; No. 2007/271
Online adgang:Full text available on IMF
LEADER 01806cas a2200265 a 4500
001 AALejournalIMF009671
008 230101c9999 xx r poo 0 0eng d
020 |c 5.00 USD 
020 |z 9781451868340 
022 |a 1018-5941 
040 |a BD-DhAAL  |c BD-DhAAL 
100 1 |a Kumhof, Michael. 
245 1 0 |a Simple Monetary Rules Under Fiscal Dominance /  |c Michael Kumhof, Ricardo Nunes, Irina Yakadina. 
264 1 |a Washington, D.C. :  |b International Monetary Fund,  |c 2007. 
300 |a 1 online resource (25 pages) 
490 1 |a IMF Working Papers 
500 |a <strong>Off-Campus Access:</strong> No User ID or Password Required 
500 |a <strong>On-Campus Access:</strong> No User ID or Password Required 
506 |a Electronic access restricted to authorized BRAC University faculty, staff and students 
520 3 |a Is aggressive monetary policy response to inflation feasible in countries that suffer from fiscal dominance? We find that if nominal interest rates are allowed to respond to government debt, even aggressive rules that satisfy the Taylor principle can produce unique equilibria. However, resulting inflation is extremely volatile and zero lower bound on nominal interest rates is frequently violated. Within the set of feasible rules the optimal response to inflation is highly negative, and more aggressive inflation fighting is inferior from a welfare point of view. The welfare gain from responding to fiscal variables is minimal compared to the gain from eliminating fiscal dominance. 
538 |a Mode of access: Internet 
700 1 |a Nunes, Ricardo. 
700 1 |a Yakadina, Irina. 
830 0 |a IMF Working Papers; Working Paper ;  |v No. 2007/271 
856 4 0 |z Full text available on IMF  |u http://elibrary.imf.org/view/journals/001/2007/271/001.2007.issue-271-en.xml  |z IMF e-Library