The Dire Effects of the Lack of Monetary and Fiscal Coordination

Leonardo Melosi and Francesco Bianchi

No 110, 2017 Meeting Papers from Society for Economic Dynamics

Abstract: We study the problem of coordination between the monetary and the fiscal authorities at the zero lower bound. Lack of coordination between the monetary and fiscal authorities can lead to an explosive dynamics of inflation and large output losses. Policy makers can achieve the goal of mitigating the recession without giving up on long-run macroeconomic stability by committing to inflate away only the portion of debt resulting from an unusually large recession.

Date: 2017
New Economics Papers: this item is included in nep-dge, nep-mac and nep-mon
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Citations: View citations in EconPapers (7)

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Related works:
Journal Article: The dire effects of the lack of monetary and fiscal coordination (2019)
Working Paper: The Dire Effects of the Lack of Monetary and Fiscal Coordination (2017)
Working Paper: The Dire Effects of the Lack of Monetary and Fiscal Coordination (2017)
Working Paper: The Dire Effects of the Lack of Monetary and Fiscal Coordination (2017)
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Persistent link: https://EconPapers.repec.org/RePEc:red:sed017:110

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