search query: @indexterm FISCAL POLICY / total: 505
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| Author: | Canzoneri, M. B. Cumby, R. E. Diba, B. T. |
| Title: | Is the price level determined by the needs of fiscal solvency? |
| Journal: | American Economic Review
2001 : DEC, VOL. 91:5, p. 1221-1238 |
| Index terms: | Economic policy Fiscal policy USA |
| Language: | eng |
| Abstract: | The fiscal theory of price determination suggests that if primary surpluses evolve independently of gorvernment debt, the equilibrium price level "jumps" to assure fiscal sovency. In this non-Ricardian regime, fiscal policy - not monetary policy - provides the nominal anchor. This paper argues that Ricardian regimes are as theoretically plausible as non-Ricardian regimes, and provide a more plausible interpretation of certain aspects of the postwar U.S. data than non-Ricardian regimes. |
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