EconPapers    
Economics at your fingertips  
 

On the Interaction of Monetary and Fiscal Policy

Jagjit Chadha () and Charles Nolan ()

Cambridge Working Papers in Economics from Faculty of Economics, University of Cambridge

Abstract: In this paper we review some fundamental issues that have been identified by macroeconomists in discussing the co-ordination of monetary and fiscal policy. As Sargent and Wallace (1981) graphically illustrated, the consolidated public sector present-value budget constraint means that monetary and fiscal policy are ultimately joint decisions. However, as we show in a quantitative general equilibrium model, even when fiscal solvency is not an issue, monetary and fiscal policy may still need to be co-ordinated.

Keywords: optimal simple rules; monetary and fiscal policy; finite lives (search for similar items in EconPapers)
JEL-codes: E21 E32 E52 E63 (search for similar items in EconPapers)
New Economics Papers: this item is included in nep-dge and nep-mon
Date: 2003-01
Note: Ma
References: View references in EconPapers View complete reference list from CitEc
Citations View citations in EconPapers (10) Track citations by RSS feed

Downloads: (external link)
http://www.econ.cam.ac.uk/research/repec/cam/pdf/wp0303.pdf (application/pdf)

Related works:
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: http://EconPapers.repec.org/RePEc:cam:camdae:0303

Access Statistics for this paper

More papers in Cambridge Working Papers in Economics from Faculty of Economics, University of Cambridge
Series data maintained by Jake Dyer ().

 
Page updated 2017-06-19
Handle: RePEc:cam:camdae:0303