ROGOFF REVISITED: THE CONSERVATIVE CENTRAL BANKER PROPOSITION UNDER ACTIVE FISCAL POLICIES

Andrew Hughes Hallett, Jan Libich and Petr Stehlik

CAMA Working Papers from Centre for Applied Macroeconomic Analysis, Crawford School of Public Policy, The Australian National University

Abstract: This paper generalizes and qualifies an influential monetary policy result due to Rogoff (1985) by taking fiscal policy, and fiscal-monetary interactions, into account. It shows that an appointment of a conservative central banker may, under a range of circumstances, (i) increase the average level of inflation; or (ii) decrease this level too much, producing deflation; and/or (iii) reverse the direction of the monetary response to shocks (from tightening to easing and vice versa). We show the conditions under which this can happen.

JEL-codes: E61 E63 (search for similar items in EconPapers)
Pages: 9 pages
Date: 2007-10
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Citations: View citations in EconPapers (4)

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https://cama.crawford.anu.edu.au/sites/default/fil ... ich_stehlik_2007.pdf (application/pdf)

Related works:
Journal Article: Rogoff revisited: The conservative central banker proposition under active fiscal policies (2009)
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Persistent link: https://EconPapers.repec.org/RePEc:een:camaaa:2007-20

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