The Roles of Monetary, Financial and Fiscal Policy with Rational Expectations
Willem Buiter
No 412, NBER Working Papers from National Bureau of Economic Research, Inc
Abstract:
The setup of the paper is as follows: Section I presents a fairly standard, small deterministic macromodel with a number of classical features. All markets clear instantaneously, there is no money illusion, and perfect foresight rules. The effects of monetary, financial, and fiscal policies in this model are analyzed. A number of nonneutrality propositions are stated. The drawback of this model is that it is ad hoc in the sense that private behavioral relationships have not been derived from explicit optimizing behavior. Section II, therefore, summarizes the results of some studies on debt neutrality and monetary superneutrality in a "fully rational" overlapping generations model. This leads to the conclusion that the ad hoc model of Section I is not a bad parable for such fully rational models. Section III abandons the assumption of universal instantaneous Wairasian equilibrium and considers the consequences of price and wage stickiness for the scope for stabilization policy; stochastic models are analyzed here, which also permits the consideration of some of the interesting issues associated with incomplete information.
Date: 1979-11
Note: ITI IFM
References: View complete reference list from CitEc
Citations:
Published as "Crowding Out of Private Capital Formation by Government Borrowing in the P Resence of INtergenerational Gifts and Requests" Economic REview, vol. 2,no.2, pp. 111-142, August 1980. Also Reprinted in Macroeconomic Theory and Stabilization Policy, by Buiter, University of MI Press, pp. 255-282,Ann A
Published as "Monetary, Financial, and Fiscal Policies Under Rational Expectations" International Monetary Fund Staff Papers, Vol. 27, No. 4, pp. 785-813,(December 1980). (see also, reprint 206)
Downloads: (external link)
http://www.nber.org/papers/w0412.pdf (application/pdf)
Related works:
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:nbr:nberwo:0412
Ordering information: This working paper can be ordered from
http://www.nber.org/papers/w0412
Access Statistics for this paper
More papers in NBER Working Papers from National Bureau of Economic Research, Inc National Bureau of Economic Research, 1050 Massachusetts Avenue Cambridge, MA 02138, U.S.A.. Contact information at EDIRC.
Bibliographic data for series maintained by ().