Discretionary Policy Interactions and the Fiscal Theory of the Price Level: A SVAR Analysis on French Data

Jerome Creel, Francesco Saraceno and Paola Veroni ()
Additional contact information
Paola Veroni: OFCE - Observatoire français des conjonctures économiques (Sciences Po) - Sciences Po - Sciences Po

Post-Print from HAL

Abstract: The "fiscal theory of the price level" (FTPL; Woodford, 1995 and 2001) marks the revival of interest for fiscal policy, after the long blackout that followed the crisis of Keynesian economics. Among the causes of this revival, an important role was played by the dramatic drop in US public debt during the Clinton presidency. The reduced stock of bonds in the hands of households led researchers to re-investigate the relationship between consumption, the government intertemporal budget constraint, wealth effects and monetary policy. As we will argue below, the attempts to give empirical support to the FTPL - that had its theoretical precursors in the work of Leeper (1991) and Sims (1994) among others -, have been rather unsuccessful so far, so that its main merit lies in the fact that it brought back into the debate the interaction between fiscal and monetary policy and its effects on the level of activity and on prices (...).

Date: 2005-03-31
Note: View the original document on HAL open archive server: https://sciencespo.hal.science/hal-00972896
References: Add references at CitEc
Citations: View citations in EconPapers (7)

Published in Banca d'Italia workshop, Mar 2005, Perugia, Italy. pp.1-30

Downloads: (external link)
https://sciencespo.hal.science/hal-00972896/document (application/pdf)

Related works:
Working Paper: Discretionary Policy Interactions and the Fiscal Theory of the Price Level: A SVAR Analysis on French Data (2005)
Working Paper: Discretionary Policy Interactions and the Fiscal Theory of the Price Level: A SVAR Analysis on French Data (2005)
Working Paper: Discretionary Policy Interactions and the Fiscal Theory of the Price Level: A SVAR Analysis on French Data (2005)
Working Paper: Discretionary Policy Interactions and the Fiscal Theory of the Price Level: A SVAR Analysis on French Data (2005)
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:hal:journl:hal-00972896

Access Statistics for this paper

More papers in Post-Print from HAL
Bibliographic data for series maintained by CCSD ().