Article ID Journal Published Year Pages File Type
5083859 International Review of Economics & Finance 2013 25 Pages PDF
Abstract
► We study optimal fiscal and monetary policy with distortionary taxes. ► Distortionary taxes on consumption, labor, capital in a DSGE model. ► Optimal fiscal and monetary rules maximize second-order approximation to utility. ► With sticky prices full inflation stabilization is optimal for any tax instrument. ► Optimal output targeting of monetary policy depends on tax instrument chosen.
Keywords
Related Topics
Social Sciences and Humanities Economics, Econometrics and Finance Economics and Econometrics
Preview
Distortionary tax instruments and implementable monetary policy
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