Managing pessimistic expectations and fiscal policy
نویسندگان
چکیده
منابع مشابه
Expectations, Stagnation and Fiscal Policy∗
Stagnation as the new norm and fiscal policy are examined in a New Keynesian model with adaptive learning determining expectations. We impose inflation and consumption lower bounds, which can be relevant when agents are pessimistic. The inflation target is locally stable under learning. Pessimistic initial expectations may sink the economy into steady-state stagnation with deflation. The deflat...
متن کاملFiscal Policy in an Expectations Driven Liquidity Trap∗
In the basic New Keynesian model in which the monetary authority operates a Taylor rule, multiple rational expectations equilibria arise, some of which display all the features of a liquidity trap. We show that a loss in confidence can set the economy on a deflationary path that eventually prevents the monetary authority from adjusting the interest rate and can lead to potentially very large ou...
متن کاملCommentary: Fiscal Policy and the Fiscal Position
As economics has developed, a number of different fiscal principles have been suggested. Perhaps the oldest principle was that the Government should balance its books. This principle was adopted by the 1979 Conservative Government but they delivered a budget in balance or in surplus only in 1988/89 and 1989/90. The same principle has been adopted in the Stability and Growth Pact, albeit with an...
متن کاملFiscal year 1994. Great expectations.
File Cards .............................................................................. A55 Index to Advertisers ............................................................................. A96 A8 by gest on N ovem er 3, 2017 http://ciajournals.org/ D ow nladed from Iirculatioin Volume 89 Number 2 February 1994 Annotated Table of
متن کاملFiscal Policy and Unemployment
This paper explores the interaction between fiscal policy and unemployment. It develops a novel dynamic model in which unemployment can arise but can be mitigated by tax cuts and public spending increases. Such policies are fiscally costly, but can be financed by issuing government debt. In the context of this model, the paper analyzes the simultaneous determination of fiscal policy and unemplo...
متن کاملذخیره در منابع من
با ذخیره ی این منبع در منابع من، دسترسی به آن را برای استفاده های بعدی آسان تر کنید
ژورنال
عنوان ژورنال: Theoretical Economics
سال: 2013
ISSN: 1933-6837
DOI: 10.3982/te899