RAMSEY OPTIMAL POLICY IN THE NEW-KEYNESIAN MODEL WITH PUBLIC DEBT
نویسندگان
چکیده
In the discrete-time new-Keynesian model with public debt, Ramsey optimal policy eliminates indeterminacy of simple-rules multiple equilibria between fiscal theory price level versus an unpleasant equilibrium. If debt volatility is taken into account loss function, interest rate responds to besides inflation and output gap. Else, Taylor rule identical when there zero debt. The fiscal-rule parameter implies local stability public-debt dynamics (“passive” policy).
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ژورنال
عنوان ژورنال: Macroeconomic Dynamics
سال: 2021
ISSN: ['1365-1005', '1469-8056']
DOI: https://doi.org/10.1017/s136510052000070x