European Parliament Library

Optimal Fiscal and Monetary Policy with Nominal and Indexed Debt, Thomas Cosimano, Michael Gapen

Contributor
Abstract
This paper highlights the importance of debt composition in setting optimal fiscal and monetary policy over short-run business cycles and in the long run. Nominal debt as state-contingent debt can be a significant policy tool to reduce the volatility of distortionary government policy, thereby reducing macroeconomic volatility while increasing equilibrium output and consumption. The welfare gain from using nominal debt to hedge against shocks to the government budget is as large as the welfare gain from the ability to issue debt
Table Of Contents
""Contents""; ""I. INTRODUCTION""; ""II. A STOCHASTIC MONETARY ECONOMY""; ""A. Production""; ""B. Households""; ""III. THE RAMSEY EQUILIBRIUM""; ""A. Calibration and Solution Procedure""; ""B. Results""; ""IV. CONCLUSION""; ""References""
Language
eng
Literary Form
non fiction
Note
Description based upon print version of record
Physical Description
1 online resource (39 p.)
Specific Material Designation
remote
Form Of Item
online
Isbn
9781451919974

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