Abstract
| Original language | English |
|---|---|
| Place of Publication | Tilburg |
| Publisher | Macroeconomics |
| Number of pages | 48 |
| Volume | 1999-108 |
| Publication status | Published - 1999 |
Publication series
| Name | CentER Discussion Paper |
|---|---|
| Volume | 1999-108 |
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Keywords
- discretionary monetary policy
- decentralized fiscal policy
- monetary union
- in‡ation targets
- debt targets
Cite this
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Inflation Targets and Debt Accumulation in a Monetary Union. / Beetsma, R.M.W.J.; Bovenberg, A.L.
Tilburg : Macroeconomics, 1999. (CentER Discussion Paper; Vol. 1999-108).Research output: Working paper › Discussion paper › Other research output
TY - UNPB
T1 - Inflation Targets and Debt Accumulation in a Monetary Union
AU - Beetsma, R.M.W.J.
AU - Bovenberg, A.L.
N1 - Pagination: 48
PY - 1999
Y1 - 1999
N2 - This paper explores the interaction between centralized monetary policy and decentralized fiscal policy in a monetary union. Discretionary monetary policy su¤ers from a failure to commit. Moreover, decentralized fiscal policymakers impose externalities on each other through the influence of their debt policies on the common monetary policy. These imperfections can be alleviated by adopting state-contingent in‡ation targets (to combat the monetary policy commitment problem) and shock-contingent debt targets (to internalize the externalities due to decentralized fiscal policy).
AB - This paper explores the interaction between centralized monetary policy and decentralized fiscal policy in a monetary union. Discretionary monetary policy su¤ers from a failure to commit. Moreover, decentralized fiscal policymakers impose externalities on each other through the influence of their debt policies on the common monetary policy. These imperfections can be alleviated by adopting state-contingent in‡ation targets (to combat the monetary policy commitment problem) and shock-contingent debt targets (to internalize the externalities due to decentralized fiscal policy).
KW - discretionary monetary policy
KW - decentralized fiscal policy
KW - monetary union
KW - in‡ation targets
KW - debt targets
M3 - Discussion paper
VL - 1999-108
T3 - CentER Discussion Paper
BT - Inflation Targets and Debt Accumulation in a Monetary Union
PB - Macroeconomics
CY - Tilburg
ER -