Time-consistent rules in monetary and fiscal policy

Daniel Carroll

Economic Commentary, 2012, issue Nov

Abstract: The intended effects of a government policy can be distorted by the public?s expectations about how strictly it will be enforced. If households and businesses cannot be certain that a policy will remain unchanged over its scheduled tenure, they will adjust their response to it to reflect this uncertainty. One way of mitigating the uncertainty is to add rules to new policies when they are enacted that would make altering the policies very difficult in the future.

Keywords: Monetary policy; Fiscal policy (search for similar items in EconPapers)
Date: 2012
References: Add references at CitEc
Citations:

Downloads: (external link)
https://doi.org/10.26509/frbc-ec-201219 Full Text (text/html)
https://www.clevelandfed.org/-/media/project/cleve ... iscal-policy-pdf.pdf Full Text (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: https://EconPapers.repec.org/RePEc:fip:fedcec:y:2012:i:nov13:n:2012-19

Ordering information: This journal article can be ordered from

Access Statistics for this article

More articles in Economic Commentary from Federal Reserve Bank of Cleveland Contact information at EDIRC.
Bibliographic data for series maintained by 4D Library ().