the present paper examines the mitigating effect of monetary and fiscal policies on the “growth laffer curve” (glc) using a panel data of 38 high income countries over the period 2003-2012. adopting generalised method of moments (gmm) estimators, the paper finds evidence substantiating the presence of an inverted-u glc. moreover, the evidence suggests that the glc shifts downward by employing e...

This paper studies the effects of monetary policy rules in a fiscal federation, such as the European Union. The focus of the analysis is the interaction between the fiscal policy of member countries (regions) and the monetary authority. Each of the countries structures its fiscal policy (spending and taxes) with the interests of its citizens in mind. When capital markets are integrated, the fis...

This paper studies the determinacy properties of monetary and fiscal policy rules in a small-scale New Keynesian model. We modify the standard model in two ways. First, we allow positive public debt in the steady state as in Leeper [Journal of Monetary Economics 27, 129–147 (1991)]. Second, we add rule-of-thumb consumers as in Bilbiie [Journal of Economic Theory 140, 162–196 (2008)]. Leeper stu...

a r t i c l e i n f o Most CGE models are real and cannot be easily used to study monetary policies. This paper develops a financial CGE model with interaction between real and financial side of the Chinese economy and applies the model to study oil price shocks and monetary policy responses. Unlike macro models in the current literature, the financial CGE model can be implemented to look into ...

Well before the global financial crisis, the stance of fiscal policy in a number of countries had raised concerns about risks for the outcomes of monetary policy. To provide some insights this paper examines the fiscal-monetary interactions in a novel game theory framework with asynchronous timing of moves. It generalizes the standard commitment concept of Stackelberg leadership by making it dy...