Review of the Fiscal Theory of the Price Level

Hidekazu Niwa
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Hidekazu Niwa: Osaka School of International Public Policy,Osaka University

No 22E002, OSIPP Discussion Paper from Osaka School of International Public Policy, Osaka University

Abstract: This study reviews the fiscal theory of the price level (FTPL). Our goal is to briefly explain the following three points. First, how is an equilibrium determined in a simple model where prices are perfectly flexible and only one-period government bonds? Second, what is the intuition for equilibrium determination? Third, how does introducing long-term bonds or nominal price rigidities change results in the simplest case?

Keywords: Fiscal Theory of the Price Level; Fiscal-Monetary Interaction; Government Solvency (search for similar items in EconPapers)
JEL-codes: E31 E58 E63 (search for similar items in EconPapers)
Pages: 20pages
Date: 2022-04
New Economics Papers: this item is included in nep-mac and nep-mon
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