Fiscal and Monetary Regimes: A Strategic Approach

Guillaume Plantin and Barthélemy, Jean
Authors registered in the RePEc Author Service: Jean Barthélemy

No 12903, CEPR Discussion Papers from C.E.P.R. Discussion Papers

Abstract: This paper develops a full-fledged strategic analysis of Wallace’s “game of chicken†. A public sector facing legacy nominal liabilities is comprised of fiscal and monetary authorities that respectively set the primary surplus and the price level in a non-cooperative fashion. We find that the post 2008 feature of indefinitely postponed fiscal consolidation and rapid expansion of the Federal Reserve’s balance sheet is consistent with a strategic setting in which neither authority can commit to a policy beyond its current mandate, and the fiscal authority has more bargaining power than the monetary one at each date.

Date: 2018-05
New Economics Papers: this item is included in nep-cba, nep-gth and nep-mon
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Citations: View citations in EconPapers (6)

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Related works:
Working Paper: Fiscal and Monetary Regimes: A Strategic Approach (2019)
Working Paper: Fiscal and Monetary Regimes: A Strategic Approach (2018)
Working Paper: Fiscal and Monetary Regime: A Strategic Approach (2018)
Working Paper: Fiscal and Monetary Regimes: A Strategic Approach (2018)
Working Paper: Fiscal and Monetary Regime: A Strategic Approach (2018)
Working Paper: Fiscal and Monetary Regime: A Strategic Approach (2018)
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