EconPapers    
Economics at your fingertips  
 

The time consistency of monetary and fiscal policies

Fernando Alvarez, Patrick Kehoe and Pablo Neumeyer

No 616, Working Papers from Federal Reserve Bank of Minneapolis

Abstract: Are optimal monetary and fiscal policies time consistent in a monetary economy? Yes, but if and only if under commitment the Friedman rule of setting nominal interest rates to zero is optimal. This result is of applied interest because the Friedman rule is optimal for the standard preferences used in applied work, those consistent with the growth facts. (Replaced by Staff Report No: 305)

Keywords: Monetary policy; Fiscal policy; Interest rates (search for similar items in EconPapers)
Date: 2002
References: Add references at CitEc
Citations: View citations in EconPapers (4)

Downloads: (external link)
http://www.minneapolisfed.org/research/common/pub_detail.cfm?pb_autonum_id=857

Related works:
Working Paper: The time consistency of monetary and fiscal policies (2003) Downloads
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:fedmwp:616

Access Statistics for this paper

More papers in Working Papers from Federal Reserve Bank of Minneapolis Contact information at EDIRC.
Bibliographic data for series maintained by Kate Hansel ().

 
Page updated 2025-03-30
Handle: RePEc:fip:fedmwp:616