Simple Macroeconomic Policies and Welfare: a quantitative assessment

Eurilton Araújo and Alexandre Cunha

No 360, Working Papers Series from Central Bank of Brazil, Research Department

Abstract: We quantitatively compare three macroeconomic policies in a cash-credit goods framework. The policies are: the optimal one; another one that fully smoothes out oscillations in output; and a simple one that prescribes constant values for tax and monetary growth rates. As often found in the related literature, the welfare gains or losses from changing from a given policy to another are small. We also show that the simple policy dominates the one that leads to constant output.

Date: 2014-08
New Economics Papers: this item is included in nep-cba, nep-dge, nep-mac, nep-mon and nep-pbe
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Journal Article: Simple Macroeconomic Policies and Welfare: A Quantitative Assessment (2014)
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