On the Interaction between Monetary and Fiscal Policies under Perfect Foresight

Nissan Liviatan

Oxford Economic Papers, 1988, vol. 40, issue 1, 193-203

Abstract: The author defines two parameters: the proportion (j) of interest payments on government bonds financed by taxes (as the fiscal paramet er) and the ratio (a) of money to bond finance of the deficit (as the monetary parameter). It is shown that while the effect of an increase in j is deflationary, the effect of a is ambiguous and depends on the level of j. The model is used to study the questions o f monetary neutrality, pure bond finance, and pure money finance of the deficit, as well as the tradeoff between monetary and fiscal policie s in maintaining a given level of inflation. Copyright 1988 by Royal Economic Society.

Date: 1988
References: Add references at CitEc
Citations: View citations in EconPapers (2)

Downloads: (external link)
http://links.jstor.org/sici?sici=0030-7653%2819880 ... 0.CO%3B2-J&origin=bc full text (application/pdf)
Access to full text is restricted to JSTOR subscribers. See http://www.jstor.org for details.

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:oup:oxecpp:v:40:y:1988:i:1:p:193-203

Ordering information: This journal article can be ordered from
https://academic.oup.com/journals

Access Statistics for this article

Oxford Economic Papers is currently edited by James Forder and Francis J. Teal

More articles in Oxford Economic Papers from Oxford University Press Oxford University Press, Great Clarendon Street, Oxford OX2 6DP, UK.
Bibliographic data for series maintained by Oxford University Press ().