High trend inflation and passive monetary detours

Guido Ascari; Anna Florio; Anna Paola Florio; Alessandro Gobbi

doi:10.1016/j.econlet.2018.08.030

High trend inflation and passive monetary detours

Guido Ascari, Anna Florio, Anna Paola Florio, Alessandro Gobbi

Università Cattolica del Sacro Cuore

Polytechnic University of Milan

Risultato della ricerca: Contributo in rivista › Articolo in rivista

Abstract

Does the long-run Taylor principle (Davig and Leeper, 2007) hold when both monetary and fiscal policies can switch and there is positive trend inflation? We find that with high trend inflation passive monetary detours are no longer possible, whatever fiscal policy is in place. This has important policy implications in terms of flexibility and monetary–fiscal authorities coordination.

Lingua originale	English
pagine (da-a)	138-142
Numero di pagine	5
Rivista	Economics Letters
Volume	172
DOI	https://doi.org/10.1016/j.econlet.2018.08.030
Stato di pubblicazione	Pubblicato - 2018

Keywords

Trend inflation, Monetary–fiscal policy interactions, Markov-switching, Determinacy

Accesso al documento

10.1016/j.econlet.2018.08.030

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title = "High trend inflation and passive monetary detours",

abstract = "Does the long-run Taylor principle (Davig and Leeper, 2007) hold when both monetary and fiscal policies can switch and there is positive trend inflation? We find that with high trend inflation passive monetary detours are no longer possible, whatever fiscal policy is in place. This has important policy implications in terms of flexibility and monetary–fiscal authorities coordination.",

keywords = "Trend inflation, Monetary–fiscal policy interactions, Markov-switching, Determinacy, Trend inflation, Monetary–fiscal policy interactions, Markov-switching, Determinacy",

author = "Guido Ascari and Anna Florio and Florio, {Anna Paola} and Alessandro Gobbi",

year = "2018",

doi = "10.1016/j.econlet.2018.08.030",

language = "English",

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AU - Ascari, Guido

AU - Florio, Anna

AU - Florio, Anna Paola

AU - Gobbi, Alessandro

PY - 2018

Y1 - 2018

N2 - Does the long-run Taylor principle (Davig and Leeper, 2007) hold when both monetary and fiscal policies can switch and there is positive trend inflation? We find that with high trend inflation passive monetary detours are no longer possible, whatever fiscal policy is in place. This has important policy implications in terms of flexibility and monetary–fiscal authorities coordination.

AB - Does the long-run Taylor principle (Davig and Leeper, 2007) hold when both monetary and fiscal policies can switch and there is positive trend inflation? We find that with high trend inflation passive monetary detours are no longer possible, whatever fiscal policy is in place. This has important policy implications in terms of flexibility and monetary–fiscal authorities coordination.

KW - Trend inflation, Monetary–fiscal policy interactions, Markov-switching, Determinacy

UR - http://hdl.handle.net/10807/126525

U2 - 10.1016/j.econlet.2018.08.030

DO - 10.1016/j.econlet.2018.08.030

M3 - Article

SN - 0165-1765

VL - 172

SP - 138

EP - 142

JO - Economics Letters

JF - Economics Letters

ER -

High trend inflation and passive monetary detours

Abstract

Keywords

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Altri file e collegamenti

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