Journal of Macroeconomics
Fiscal and Monetary Policy Interactions: Empirical Evidence and Optimal Policy Using a Structural New-Keynesian Model [статья]
Опубликовано на портале: 18-09-2007V. Anton Muscatelli, Patrizio Tirelli, Carmine Trecroci Journal of Macroeconomics. 2004. Vol. 26. No. 2. P. 257-280.
This paper examines the interaction of monetary and fiscal policies using an estimated New-Keynesian dynamic general equilibrium model for the US. In contrast to earlier work using VAR models, we show that the strategic complementarity or substitutability of fiscal and monetary policy depends crucially on the types of shocks hitting the economy, and on the assumptions made about the underlying structural model. We also demonstrate that countercyclical fiscal policy can be welfare-reducing if fiscal and monetary policy rules are inertial and not co-ordinated.
Опубликовано на портале: 22-10-2007Torben Andersen Journal of Macroeconomics. 2005. Vol. 27. No. 1. P. 1-29.
Policy mix problems may arise in a currency union like the EMU since monetary policy (targeting inflation) is centralized and fiscal policy (targeting output) is decentralized. This issue is considered in a setting allowing for various cross-country interdependencies and types of shocks (demand/supply; aggregate/idiosyncratic). An inappropriate stabilization of shocks arises, and fiscal policy is too counter-cyclical when shocks are aggregate, but insufficiently counter-cyclical for idiosyncratic shocks. The stabilization bias is increasing in the number of fiscal decision makers when shocks are aggregate, but decreasing for idiosyncratic shocks. Numerical illustrations show that the cost of non-cooperative fiscal policies is higher for aggregate than for idiosyncratic shocks.
Опубликовано на портале: 23-12-2007Kirdan Lees Journal of Macroeconomics. 2007. Vol. 29. No. 4. P. 959-975.
This paper measures the benefits of commitment-based monetary policy over discretion for a small open economy inflation targeting country—New Zealand. Significant gains accrue from commitment policy. If commitment-based policy is unavailable, the government can recoup much of the gains to commitment through optimal delegation, asking the Reserve Bank of New Zealand to care more about inflation stabilisation. The 1999 PTA, the core of the policy contract between the New Zealand government and the Reserve Bank of New Zealand, placed an increased emphasis on stabilisation of output, interest rates and the exchange rate. This is inconsistent with a shift to optimal delegation behaviour and must stem from a changed perception of the welfare costs of macroeconomic stabilization on the part of the Government. This is shown to be true when the definition of inflation is extended to a medium term measure.
Опубликовано на портале: 16-11-2007Jagjit S. Chadha, Charles Nolan Journal of Macroeconomics. 2007. Vol. 29. No. 4. P. 665-689 .
Stabilization policy involves joint monetary and fiscal rules. We develop a model enabling us to characterize systematic simple monetary and fiscal policy over the business cycle. We principally focus on the following question. What are the key properties of the joint simple rule governing the conduct of systematic stabilization policy? We find that conducting stabilization policy incorporates not only a set of monetary policy choices governed by the so-called ‘Taylor principle’ but also fiscal policy that gives considerable force to automatic stabilizers. Recent US and UK monetary and fiscal choices seem broadly consistent with this model. This result is found to be robust to a number of alternate modeling strategies
Should Central Banks React to Exchange Rate Movements? An Analysis of the Robustness of Simple Policy Rules Under Exchange Rate Uncertainty [статья]
Опубликовано на портале: 23-12-2007Timo Wollmershäuser Journal of Macroeconomics. 2006. Vol. 28. No. 3. P. 493-519.
This paper evaluates the performance of simple policy rules in an open economy. By introducing a high degree of exchange rate uncertainty we find that policy rules with an important feedback from movements in the real exchange rate are very robust to uncertainty about the true exchange rate model. A closed economy rule performs badly in most exchange rate specifications. This is in contrast to the findings of many other studies. In our view, this result is due to the fact that these studies assume a known and reliable relationship between the exchange rate and the interest rate.
Опубликовано на портале: 23-12-2007Marianne Nessén Journal of Macroeconomics. 2002. Vol. 24. No. 3. P. 313-329.
An inflation targeting central bank aims to stabilize the rate of inflation. But which ‘inflation’ should this be? Quarterly, annual, biennial? We analyze the effects on optimal monetary policy of increasing the period over which the inflation rate is defined. When inflation stabilization is the sole objective of the central bank, more aggressive monetary policy results; but when output stabilization is also a concern the result is a more cautious conduct of monetary policy and less variability in output. Thus, there is an observational equivalence between increasing the period over which inflation is measured and increasing the weight on output stabilization in the central bank’s objective function. The analogy between inflation targeting with an infinite-period target and price level targeting is also examined.
Опубликовано на портале: 13-04-2004James B. Ramsey, Albert Alexander Journal of Macroeconomics. 1970. Vol. 6. No. 3. P. 347-356.
An econometric analysis is undertaken of the model developed by Blatt (1978). An important point made by Blatt was that the standard statistical methods used by economists would have led to egregious errors in inference - in particular, estimating a stable linear relationship in a world generated by an unstable nonlinear model. It is shown that the application of specification error tests pioneered by Ramsey (1970, 1974, 1976) leads to immediate and overwhelming rejection of the incorrect model. The major policy conclusion is that empirical economists must learn to test their models before trying to make inferences. Although specification error tests do not solve all inferential difficulties, they do indicate that such a model may be misspecified.