EconPapers    
Economics at your fingertips  
 

How does the timing of markets affect optimal monetary and fiscal policy in sticky price models?

Houyang Du, Ye Guo and Xuan Liu

Economic Modelling, 2018, vol. 72, issue C, 237-248

Abstract: This paper studies optimal monetary and fiscal policy with the Svensson timing in a sticky price model of a stochastic production economy. In this model, the government collects distortionary taxes, prints money, and issues nominal non-state-contingent bonds to finance an exogenous stream of public spending. The numerical results show that (1) optimal monetary and fiscal policy is quantitatively sensitive to the timing of markets; (2) the fundamental nature of optimal monetary and fiscal policy is not sensitive to the timing of markets; and (3) the findings are robust to key structural parameters.

Keywords: Optimal monetary and fiscal policy; Svensson timing; Sticky prices (search for similar items in EconPapers)
JEL-codes: E31 E52 (search for similar items in EconPapers)
Date: 2018
References: View references in EconPapers View complete reference list from CitEc
Citations Track citations by RSS feed

Downloads: (external link)
http://www.sciencedirect.com/science/article/pii/S0264999317310702
Full text for ScienceDirect subscribers only

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: https://EconPapers.repec.org/RePEc:eee:ecmode:v:72:y:2018:i:c:p:237-248

Access Statistics for this article

Economic Modelling is currently edited by S. Hall and P. Pauly

More articles in Economic Modelling from Elsevier
Bibliographic data for series maintained by Dana Niculescu ().

 
Page updated 2018-06-23
Handle: RePEc:eee:ecmode:v:72:y:2018:i:c:p:237-248