Welfare maximizing operational monetary and tax policy rules
Robert Kollmann ()
ULB Institutional Repository from ULB -- Universite Libre de Bruxelles
This paper computes welfare-maximizing monetary and tax policy feedback rules in a calibrated dynamic general equilibrium model with sticky prices. The government makes exogenous final good purchases, levies a proportional income tax, and issues nominal one-period bonds. A quadratic approximation method is used to solve the model and to compute household welfare. Optimized policy has a strong anti-inflation stance and implies persistent fluctuations of the tax rate and of public debt. Very simple optimized policy rules, under which the interest rate just responds to inflation and the tax rate just responds to public debt, yield a welfare level very close to that generated by richer rules. © 2008 Cambridge University Press.
Keywords: Fiscal policy; Monetary policy; Welfare (search for similar items in EconPapers)
Note: SCOPUS: ar.j
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (24) Track citations by RSS feed
Published in: Macroeconomic Dynamics (2008) v.12 nÂ° S1,p.112-125
Downloads: (external link)
https://dipot.ulb.ac.be/dspace/bitstream/2013/7620/1/rk-0001.pdf rk-0001 (application/pdf)
Journal Article: WELFARE-MAXIMIZING OPERATIONAL MONETARY AND TAX POLICY RULES (2008)
Working Paper: Welfare-Maximizing Operational Monetary and Tax Policy Rules (2004)
This item may be available elsewhere in EconPapers: Search for items with the same title.
Export reference: BibTeX
RIS (EndNote, ProCite, RefMan)
Persistent link: https://EconPapers.repec.org/RePEc:ulb:ulbeco:2013/7620
Ordering information: This working paper can be ordered from
http://hdl.handle.ne ... .ulb.ac.be:2013/7620
Access Statistics for this paper
More papers in ULB Institutional Repository from ULB -- Universite Libre de Bruxelles Contact information at EDIRC.
Bibliographic data for series maintained by Benoit Pauwels ().