主 题: The Macroeconomic Impact of Monetary-Fiscal Policy in a “Fiscal Dominance” World
内容简介: Many advanced economies are entering into a period of fast growing government debt and aging populations. Fiscal theory has made it clear that fiscal behavior can be a primary source for changes in the inflation rate and have sizeable effects on macroeconomy. This paper focuses on the question of what monetary and fiscal policy can do and should do in a fiscal dominance world. We first highlight that both amplification and fiscal cushion effects are always at work jointly in determining the evolution of inflation. We find the threshold of maturity of government bonds beyond which more aggressive monetary policy dampens inflation volatility is three quarters. In addition, we conduct welfare analysis to quantitatively evaluate the costs and benefits brought by long-term debt. Our results show that the threshold of government debt maturity above which an aggressive monetary policy improves welfare is eight quarters. More importantly, we characterize optimal monetary and fiscal policy using simple and implementable rules. Our results indicate that an optimal monetary and fiscal combination calls for an aggressive response in both rules. Finally, we solve the Ramsey problem and evaluate to what extent the optimized simple rules are desirable. We calculate the welfare losses associated with optimized simple rules to be around 2.16 percent in consumption unit, indicating that optimized simple monetary-fiscal rule is still significantly welfare inferior to the Ramsey optimal policy.
报告人: 贾鹏飞 博士
时 间: 2018-06-08 14:00
地 点: 位育楼117
举办单位: 金融学院 经济与金融研究院 科研部
