Fiscal disciplining effect of central bank opacity: Stackelberg versus Nash equilibrium

Meixing Dai () and Moïse Sidiropoulos

MPRA Paper from University Library of Munich, Germany

Abstract: In a Stackelberg equilibrium, central bank opacity has a fiscal disciplining effect in the sense that it induces the government to reduce taxes and public expenditures, leading hence to lower inflation and output distortions. This effect could disappear or be dominated by the direct effect of opacity when the fiscal and monetary authorities play a Nash game.

Keywords: Distortionary taxes; output distortions; central bank transparency (opacity); fiscal disciplining effect. (search for similar items in EconPapers)
JEL-codes: E52 E58 E62 E63 H30 (search for similar items in EconPapers)
Date: 2011
New Economics Papers: this item is included in nep-cba, nep-mac, nep-mon and nep-pbe
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (5)

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Related works:
Journal Article: Fiscal disciplining effect of central bank opacity: Stackelberg versus Nash equilibrium (2011)
Working Paper: Fiscal disciplining effect of central bank opacity: Stackelberg versus Nash equilibrium (2011)
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Persistent link: https://EconPapers.repec.org/RePEc:pra:mprapa:29843

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