search query: @indexterm fiscal policy / total: 505
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| Author: | Blake, A. P. Weale, M. |
| Title: | Costs of separating budgetary policy from control of inflation: a neglected aspect of central bank independence |
| Journal: | Oxford Economic Papers
1998 : JUL, VOL. 50:3, p. 449-467 |
| Index terms: | Monetary policy Fiscal policy Budgeting Models |
| Language: | eng |
| Abstract: | In the paper, the importance of co-ordinating monetary and fiscal policy in a fully dynamic model is investigated. The monetary authority seeks to control inflation while the fiscal authority has a budgetary target. There are investigated the resulting Nash equilibrium and the consequences of a period of learning which may arise if each authority is not ex ante sure of the responses of the other. Both of these impact considerably on the outcome and indicate that there may be considerable costs to separating monetary and fiscal policy. |
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