Ramsey Optimal Policy in theNew-Keynesian Model with Public Debt
Jean-Bernard Chatelain and
Kirsten Ralf
PSE-Ecole d'économie de Paris (Postprint) from HAL
Abstract:
In the discrete-time new-Keynesian model with public debt, Ramsey optimal policy eliminates the indeterminacy of simple-rules multiple equilibria between the fiscal theory of the price level versus new-Keynesian versus an unpleasant equilibrium. If public debt volatility is taken into account into the loss function, the interest rate responds to public debt besides inflation and output gap. Else, the Taylor rule is identical to Ramsey optimal policy when there is zero public debt. The optimal fiscal-rule parameter implies the local stability of public-debt dynamics ("passive" fiscal policy).
Keywords: Bifurcations; Fiscal Theory of the Price Level; Ramsey Optimal Policy; New-Keynesian Model; Multiple Equilibria (search for similar items in EconPapers)
Date: 2022-09
References: Add references at CitEc
Citations: View citations in EconPapers (1)
Published in Macroeconomic Dynamics, 2022, 26 (6), ⟨10.1017/S136510052000070X⟩
There are no downloads for this item, see the EconPapers FAQ for hints about obtaining it.
Related works:
Journal Article: RAMSEY OPTIMAL POLICY IN THE NEW-KEYNESIAN MODEL WITH PUBLIC DEBT (2022) 
Working Paper: Ramsey Optimal Policy in theNew-Keynesian Model with Public Debt (2022)
Working Paper: Ramsey Optimal Policy in the New-Keynesian Model with Public Debt (2020) 
Working Paper: Ramsey Optimal Policy in the New-Keynesian Model with Public Debt (2019) 
Working Paper: Ramsey Optimal Policy in the New-Keynesian Model with Public Debt (2019) 
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:pseptp:halshs-03029890
DOI: 10.1017/S136510052000070X
Access Statistics for this paper
More papers in PSE-Ecole d'économie de Paris (Postprint) from HAL
Bibliographic data for series maintained by Caroline Bauer ().