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Optimal fiscal and monetary policy action in a closed economy

Apostolis Philippopoulos, Petros Varthalitis and Vanghelis Vassilatos ()

Economic Modelling, 2015, vol. 48, issue C, 175-188

Abstract: We study optimized monetary and fiscal feedback policy rules. The setup is a New Keynesian DSGE model of a closed economy which is solved numerically using common parameter values and fiscal data from the Euro area. Our aim is to welfare rank alternative tax-spending policy instruments used for shock stabilization and debt consolidation when, at the same time, the monetary authorities can follow a Taylor rule for the nominal interest rate.

Keywords: Feedback policy rules; New Keynesian (search for similar items in EconPapers)
Date: 2015
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Working Paper: Optimal Oscal and monetary policy action in a closed economy (2014) Downloads
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DOI: 10.1016/j.econmod.2014.10.045

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