...This chapter is a variation on the theme that monetary and fiscal policies are interrelated and must necessarily be coordinated. The issue of coordination arises when one wants to know whether it is possible for monetary policy permanently to influence an economy's inflation rate. One can imagine...

.... The discussion is based on an equation whose validity is granted by all competing theories of macroeconomics: the intertemporal government budget constraint. The chapter first considers the government budget balance and the optimal tax smoothing model of Robert Barro before analyzing monetary and fiscal policy...

... was low, there was no appreciable inflation, and the wholesale price index rose from 82.8 in 1948 to 100 in 1967. The chapter considers one idea and two institutions that were cited as the major factors for the achievements of these years: Keynesian fiscal policy, the Bretton Woods agreements...

..., and how the distinction between microeconomics and macroeconomics will blur and disappear due to factors such as the dynamic of prices and wages as a determinant of both inflation and unemployment. Finally, it comments on the future of domestic monetary and fiscal policy in relation to a nation's...

... of private investment, an effect of public capital on household utility, and maintenance expenditure. The chapter also provides a discussion of optimal fiscal policy, which is studied from the perspective of growth maximization by a benevolent government, rather than in terms of social welfare maximization...

... with an assessment of Roosevelt's fiscal policy in relation to Keynesianism. References Amenta, Edwin . 1998 . Bold Relief: Institutional Politics and the Origins of Modern American Social Policy . Princeton, NJ: Princeton University Press. Baez, Joseph A.   1999 . The New Deal...

... banking vs narrow banking Friedman Milton Glass–Steagall Act 1933 Great Depression Johnson H Knight Frank Mints Lloyd Simons Henry stock market crash of 1929 Boone P Johnson S Becker G S Summers L H inflation monetary policy fiscal policy monetary stability financial stability I’m baffled...

... default Taylor A protectionism Bordo M D Eichengreen B James H inflation globalization monetary policy fiscal policy international trade competition capacity utilization financial integration The question was: what is the quantity of money that a given country needs? Hume (“Of Money...

... nominal rigidities and instead focuses on fiscal policy rules that determine the level of government spending and taxation as a function of the state of the economy. state variable ARMA process DSGE model exogenous shock posterior Euler equation government identification technology shock New...

...This chapter discusses how dynamic stochastic general equilibrium (DSGE) models are now widely used by academics to conduct empirical research macroeconomics, as well as by central banks to interpret the current state of the economy, to analyze the impact of changes in monetary or fiscal policy...

... fiscal policy economic policy growth-enhancing policy domestic actor Athenian elite taxation post-imperial era Social War polis the model that I presented in the last chapter suggested that the procedures regulating law-and policy-making in the courts fostered innovation without loss...

... inflation tax money creation seigniorage debt service fiscal policy monetary policy primary balance banks commercial Cecchetti S Federal Reserve M1 M2 M3 etc monetary aggregates reserve requirement ratio U S economy economies mature taxation bonds inflation Phelps Edmund private sector...

... Inflation Sargent currencies fiat money inflation targeting interest rates short term Kreps D M Marimon R Sargent Thomas Sims C A Alesina A Ardagna S budget deficits central banks debt public debt to GDP ratio Favero C fiscal policy Giavazzi F government spending growth labor primary...

.... Compared to the other great European powers after 1500, Spain's fiscal policy showed no signs of imperial overstretch. Its finances were no worse—and better in a variety of ways—than those of other countries at the height of their power. According to several criteria, Castilian finances were managed...

... Depression highlighted the ineffectuality of monetary policy for rescuing the country from a slump—for breaking out of the underemployment equilibrium once this had been fully and firmly established. On the part of John Maynard Keynes, the lesson was that only fiscal policy ensured not just that money...

... but not a confining force in the culture of contentment. It then considers how the most serious general threat to contentment arises from the intrinsic tendency of capitalism to instability—to recession or depression. It also explores three lines of government intervention in economics: fiscal policy, monetary policy...

... serves as a basis for criticizing the way in which monetary policy as well as fiscal policy have been coordinated de facto in the United States over the last several years. The chapter first considers a few formal definitions of concepts that will help to clarify the analogy between the quarterback-end...

... of Austria, Hungary, Poland, and Germany, there occurred a dramatic change in the fiscal policy regime, which in each instance was associated with the end of a hyperinflation. Czechoslovakia deliberately adopted a relatively restrictive fiscal policy regime in order to maintain the value of its currency...

.... It then considers the nature of the British government deficit, along with Britain's prospective revenues from North Sea oil that coincided with a simultaneous appreciation of the pound sterling. Finally, it compares Mrs. Thatcher's policies with respect to the coordination of monetary and fiscal policy with those...

... currency. Brazil found its ability to borrow very limited, and therefore had to confront those painful choices immediately. One essay emphasizes that a country's inflation rate at any moment emerges out of the sustained monetary and fiscal policy that it chooses, now and in the future. Brazil Phillips...