European Parliament Library

Monetary and Fiscal Policy Interactions in the Post-war U.S, Susan Yang, Nora Traum

Contributor
Abstract
A New Keynesian model allowing for an active monetary and passive fiscal policy (AMPF) regime and a passive monetary and active fiscal policy (PMAF) regime is fit to various U.S. samples from 1955 to 2007. Data in the pre-Volcker periods strongly prefer an AMPF regime, but the estimation is not very informative about whether the inflation coefficient in the interest rate rule exceeds one in pre-Volcker samples. Also, whether a government spending increase yields positive consumption in a PMAF regime depends on price stickiness. An income tax cut can yield a negative labor response if monetary policy aggressively stabilizes output
Table Of Contents
Cover Page; Title Page; Copyright Page; Contents; I. Introduction; II. Model; A. Firms; B. Labor Packers; C. Households; D. Monetary Policy; E. Fiscal Policy; F. Model Solution; III. Estimation; A. Methodology; B. Prior Distributions; Table 1. Estimates for the prior 1 specification (P1), centered at the active monetary and passive fiscal policy regime; Table 2. Estimates for the prior 2 specification (P2), centered at the passive monetary and active fiscal policy regime; Table 3. Estimates for the prior 3 specification (P3), centered at the passive monetary and active fiscal policy regime
Language
eng
Literary Form
non fiction
Note
Description based upon print version of record
Physical Description
1 online resource (68 p.)
Specific Material Designation
remote
Form Of Item
online
Isbn
9781455210350

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