Article ID | Journal | Published Year | Pages | File Type |
---|---|---|---|---|
10127740 | Economics Letters | 2018 | 5 Pages |
Abstract
Does the long-run Taylor principle (Davig and Leeper, 2007) hold when both monetary and fiscal policies can switch and there is positive trend inflation? We find that with high trend inflation passive monetary detours are no longer possible, whatever fiscal policy is in place. This has important policy implications in terms of flexibility and monetary-fiscal authorities coordination.
Related Topics
Social Sciences and Humanities
Economics, Econometrics and Finance
Economics and Econometrics
Authors
Guido Ascari, Anna Florio, Alessandro Gobbi,