全球智库信息集成服务系统(G2TT): DP14720 Monetary and Fiscal Policies in Times of Large Debt: Unity is Strength

G2TT

来源类型	Discussion paper
规范类型	论文
来源ID	DP14720
	DP14720 Monetary and Fiscal Policies in Times of Large Debt: Unity is Strength
	Francesco Bianchi; Renato Faccini; Leonardo Melosi
发表日期	2020-05-06
出版年	2020
语种	英语
摘要	The COVID pandemic found policymakers facing constraints on their ability to react to an exceptionally large negative shock. The current low interest rate environment limits the tools the central bank can use to stabilize the economy, while the large public debt curtails the efficacy of fiscal interventions by inducing expectations of costly fiscal adjustments. Against this background, we study the implications of a coordinated fiscal and monetary strategy aiming at creating a controlled rise of inflation to wear away a targeted fraction of debt. Under this coordinated strategy, the fiscal authority introduces an emergency budget with no provisions on how it will be balanced, while the monetary authority tolerates a temporary increase in inflation to accommodate the emergency budget. In our model the coordinated strategy enhances the efficacy of the fiscal stimulus planned in response to the COVID pandemic and allows the Federal Reserve to correct a prolonged period of below-target inflation. The strategy results in only moderate levels of inflation by separating long-run fiscal sustainability from a short-run policy intervention.
主题	Monetary Economics and Fluctuations
关键词	monetary policy Fiscal policy Emergency budget Shock specific rule Covid
URL	https://cepr.org/publications/dp14720-7
来源智库	Centre for Economic Policy Research (United Kingdom)
资源类型	智库出版物
条目标识符	http://119.78.100.153/handle/2XGU8XDN/543640
推荐引用方式 GB/T 7714	Francesco Bianchi,Renato Faccini,Leonardo Melosi. DP14720 Monetary and Fiscal Policies in Times of Large Debt: Unity is Strength. 2020.