Schreger, Jesse
Central Bank credibility and fiscal responsibility / Jesse Schreger, Pierre Yared and Emilio Zaratiegui
Bibliografía.
We consider a New Keynesian model with strategic monetary and fiscal interactions. The fiscal authority maximizes social welfare. Monetary policy is delegated to a central bank with an anti-inflation bias that suffers from a lack of commitment. The impact of central bank hawkishness on debt issuance is nonmonotonic because increased hawkishness reduces the benefit from fiscal stimulus while simultaneously increasing real debt capacity. Starting from high levels of hawkishness (dovishness), a marginal increase in the central bank's anti-inflation bias decreases (increases) debt issuance.
BANCOS CENTRALES
POLITICA MONETARIA
DEUDA PUBLICA
ECONOMIA KEYNESIANA
INFLACION
Yared, Pierre
Zaratiegui, Emilio
The American Economic Review 2640-205X v. 6, n. 3, September 2024, p. 377-394.
Central Bank credibility and fiscal responsibility / Jesse Schreger, Pierre Yared and Emilio Zaratiegui
Bibliografía.
We consider a New Keynesian model with strategic monetary and fiscal interactions. The fiscal authority maximizes social welfare. Monetary policy is delegated to a central bank with an anti-inflation bias that suffers from a lack of commitment. The impact of central bank hawkishness on debt issuance is nonmonotonic because increased hawkishness reduces the benefit from fiscal stimulus while simultaneously increasing real debt capacity. Starting from high levels of hawkishness (dovishness), a marginal increase in the central bank's anti-inflation bias decreases (increases) debt issuance.
BANCOS CENTRALES
POLITICA MONETARIA
DEUDA PUBLICA
ECONOMIA KEYNESIANA
INFLACION
Yared, Pierre
Zaratiegui, Emilio
The American Economic Review 2640-205X v. 6, n. 3, September 2024, p. 377-394.