How does the timing of markets affect optimal monetary and fiscal policy in sticky price models?

This paper studies optimal monetary and fiscal policy with the Svensson timing in a sticky price model of a stochastic production economy. In this model, the government collects distortionary taxes, prints money, and issues nominal non-state-contingent bonds to finance an exogenous stream of public spending. The numerical results show that (1) optimal monetary and fiscal policy is quantitatively sensitive to the timing of markets; (2) the fundamental nature of optimal monetary and fiscal policy is not sensitive to the timing of markets; and (3) the findings are robust to key structural parameters.