Zero Inflation Targets: Central Bank Commitment and Fiscal Policy Outcomes

W.M. Scarth and P.J. Stemp

No 527, Department of Economics - Working Papers Series from The University of Melbourne

Abstract: This paper considers a central bank with a zero inflation target and a fiscal authority with a differing objective. Examples using calibrated models explore the consequences of the fiscal authority being aware of the central bank's objective. Situations in which the fiscal authority is able to exploit the central bank's commitment to zero inflation sre examined.

Keywords: INFLATION; CENTRAL BANKS; FISCAL POLICY (search for similar items in EconPapers)
JEL-codes: E30 E31 E50 E58 H30 (search for similar items in EconPapers)
Pages: 15 pages
Date: 1996
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Persistent link: https://EconPapers.repec.org/RePEc:mlb:wpaper:527

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