| 来源类型 | Discussion paper
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| 规范类型 | 论文
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| 来源ID | DP4321
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| DP4321 Regional Policy Design: An Analysis of Relocation, Efficiency and Equity |
| Karen Helene Ulltveit-Moe
|
| 发表日期 | 2004-03-23
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| 出版年 | 2004
|
| 语种 | 英语
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| 摘要 | The goal of this Paper is to compute optimal monetary and fiscal policy rules in a real business cycle model augmented with sticky prices, a demand for money, taxation, and stochastic government consumption. We consider simple policy rules whereby the nominal interest rate is set as a function of output and inflation, and taxes are set as a function of total government liabilities. We require policy to be implementable in the sense that it guarantees uniqueness of equilibrium. We do away with a number of empirically unrealistic assumptions typically maintained in the related literature that are used to justify the computation of welfare using linear methods. Instead, we implement a second-order accurate solution to the model. Our main findings are: First, the size of the inflation coefficient in the interest-rate rule plays a minor role for welfare. It matters only insofar as it affects the determinacy of equilibrium. Second, optimal monetary policy features a muted response to output. More importantly, interest rate rules that feature a positive response of the nominal interest rate to output can lead to significant welfare losses. Third, the optimal fiscal policy is passive. The welfare losses associated with the adoption of an active fiscal stance are, however, negligible. |
| 主题 | International Macroeconomics
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| 关键词 | Optimal fiscal and monetary policy
Nominal rigidities
Optimal inflation volatility
Second-order approximation techniques
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| URL | https://cepr.org/publications/dp4321
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| 来源智库 | Centre for Economic Policy Research (United Kingdom)
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| 资源类型 | 智库出版物
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| 条目标识符 | http://119.78.100.153/handle/2XGU8XDN/533281
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推荐引用方式
GB/T 7714 |
Karen Helene Ulltveit-Moe. DP4321 Regional Policy Design: An Analysis of Relocation, Efficiency and Equity. 2004.
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