High trend inflation and passive monetary detours

Guido Ascari; Anna Florio; Alessandro Gobbi

doi:10.1016/j.econlet.2018.08.030

High trend inflation and passive monetary detours

Guido Ascari
, Anna Florio^*
, Alessandro Gobbi

^*Autore corrispondente per questo lavoro

Facoltà di Scienze Bancarie, Finanziarie e Assicurative

Oxford Social Sciences Division
University of Pavia
Polytechnic University of Milan

Risultato della ricerca: Contributo in rivista › Articolo

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

All Science Journal Classification (ASJC) codes

Finanza
Economia ed Econometria

Keywords

Determinacy
Markov-switching
Monetary–fiscal policy interactions
Trend inflation

Accesso al documento

10.1016/j.econlet.2018.08.030

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High trend inflation and passive monetary detours

Abstract

All Science Journal Classification (ASJC) codes

Keywords

Accesso al documento

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