Commitment vs. Discretion in the UK: An Empirical Investigation of the Monetary and Fiscal Policy Regime

Tatiana Kirsanova and Stephanus le Roux

International Journal of Central Banking, 2013, vol. 9, issue 4, 99-152

Abstract: This paper investigates the conduct of monetary and fiscal policy in the post-ERM period in the United Kingdom. Using a simple DSGE New Keynesian model of non-cooperative monetary and fiscal policy interactions under fiscal intraperiod leadership, we demonstrate that the past policy in the United Kingdom is better explained by optimal policy under discretion than under commitment. We estimate policy objectives of both policymakers. We demonstrate that fiscal policy plays an important role in identifying the monetary policy regime.

JEL-codes: E52 E61 E63 (search for similar items in EconPapers)
Date: 2013
References: Add references at CitEc
Citations: View citations in EconPapers (16)

Downloads: (external link)
http://www.ijcb.org/journal/ijcb13q4a4.pdf (application/pdf)
http://www.ijcb.org/journal/ijcb13q4a4.htm (text/html)

Related works:
Working Paper: Commitment vs. Discretion in the UK: An Empirical Investigation of the Monetary and Fiscal Policy Regime (2013)
Working Paper: Commitment vs. discretion in the UK: An empirical investigation of the monetary and fiscal policy regime (2013)
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:ijc:ijcjou:y:2013:q:4:a:4

Access Statistics for this article

International Journal of Central Banking is currently edited by Loretta J. Mester

More articles in International Journal of Central Banking from International Journal of Central Banking
Bibliographic data for series maintained by Bank for International Settlements (webmaster@bis.org).