dc.contributor.author |
Forlati, Chiara |
dc.contributor.other |
Universitat Pompeu Fabra. Departament d'Economia i Empresa |
dc.date.accessioned |
2017-07-26T10:49:53Z |
dc.date.available |
2017-07-26T10:49:53Z |
dc.date.issued |
2004-07-01 |
dc.identifier |
https://econ-papers.upf.edu/ca/paper.php?id=949 |
dc.identifier.uri |
http://hdl.handle.net/10230/1183 |
dc.description.abstract |
This paper studies monetary and fiscal policy interactions in a two country model, where taxes on firms sales are optimally chosen and the monetary policy is set cooperatively.
It turns out that in a two country setting non-cooperative fiscal policy makers have an incentive to change taxes on sales depending on shocks realizations in order to reduce output production. Therefore whether the fiscal policy is set cooperatively or not matters for optimal monetary policy decisions. Indeed, as already shown in the literature, the cooperative monetary policy maker implements the flexible price allocation only when special conditions on the value of the distortions underlying the economy are met. However, if non-cooperative fiscal policy makers set the taxes on firms sales depending on shocks realizations, these conditions cannot be satisfied; conversely, when fiscal policy is cooperative, these conditions are fulfilled. We conclude that whether implementing the flexible price allocation is optimal or not depends on the fiscal policy regime. |
dc.format.mimetype |
application/pdf |
dc.language.iso |
eng |
dc.relation.ispartofseries |
Economics and Business Working Papers Series; 949 |
dc.rights |
L'accés als continguts d'aquest document queda condicionat a l'acceptació de les condicions d'ús establertes per la següent llicència Creative Commons |
dc.rights.uri |
http://creativecommons.org/licenses/by-nc-nd/3.0/es/ |
dc.title |
On optimal monetary and fiscal policy interactions in open economies |
dc.type |
info:eu-repo/semantics/workingPaper |
dc.date.modified |
2017-07-23T02:10:26Z |
dc.subject.keyword |
monetary and fiscal policy |
dc.subject.keyword |
policy coordination |
dc.subject.keyword |
Macroeconomics and International Economics |
dc.rights.accessRights |
info:eu-repo/semantics/openAccess |