135 records from EconBiz based on author Name

1. Central bank independence, government debt and the re-normalization of interest rates

Kirsanova, Tatiana; Leith, Campbell B.; Liu, Ding;
2024
Type: Graue Literatur; Non-commercial literature; Arbeitspapier; Working Paper;
Availability: Link

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2. Equity versus efficiency : optimal monetary and fiscal policy in a HANK economy

Karaferis, Vasileios; Kirsanova, Tatiana; Leith, Campbell B.;
2024
Type: Graue Literatur; Non-commercial literature; Arbeitspapier; Working Paper;
Availability: Link

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3. Evaluating fiscal policy reforms using the fiscal frontier

Chen, Xiaoshan; Leith, Campbell B.; Ricci, Mattia;
2023
Type: Working Paper;
Availability:

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4. Evaluating fiscal policy reforms using the fiscal frontier

abstract

We develop a Fiscal Frontier which traces out the maximum government debt level that can be sustained at a given welfare cost. Through duality, the intertemporal policy mix underpinning the Frontier mirrors standard Ramsey policy and defines an upper limit on the welfare gains that can be achieved by any fiscal reform. The Frontier is then used to evaluate a variety of fiscal reforms: (1) one-off changes in tax instruments considered in Laffer curve calculations, (2) a gradual reduction in capital taxation proposed by Lucas (1990), and (3) fiscal consolidation strategies akin to those considered by the Congressional Budget Office. Conventional Laffer curve calculations significantly under-estimate the sustainable debt of the US. The desirable pace of capital tax abolition has slowed since the 1970s, but the reform remains close to the Frontier. Achieving debt reduction targets considered by the Congressional Budget Office is typically very costly, especially when the fiscal consolidation is large and must be achieved quickly, but a simultaneous capital tax reform can more than offset those costs in all cases we consider.

Chen, Xiaoshan; Leith, Campbell B.; Ricci, Mattia;
2023
Type: Graue Literatur; Non-commercial literature; Arbeitspapier; Working Paper;
Availability: Link Link Link

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5. Strategic interactions in U.S. monetary and fiscal policies

Chen, Xiaoshan; Leeper, Eric M.; Leith, Campbell B.;
2020
Type: Graue Literatur; Non-commercial literature; Arbeitspapier; Working Paper;
Availability: Link

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6. Strategic Interactions in U.S. Monetary and Fiscal Policies

abstract

We estimate a model in which fiscal and monetary policy behavior arise from the optimizing behavior of distinct policy authorities, with potentially different welfare functions. Optimal time-consistent policy behavior fits U.S. time series at least as well as rules-based behavior. American policies often do not conform to the conventional mix of conservative monetary policy and debt-stabilizing fiscal policy. Even after the Volcker disinflation, policies did not achieve that conventional mix, as fiscal policy did not act to stabilize debt until the mid 1990s. A credible conservative central bank that follows a time-consistent fiscal policy leader would come close to mimicking the cooperative Ramsey policy. Had that strategic policy mix been in place, American might have avoided the Great Inflation. Enhancing cooperation between policy makers without an ability to commit may be detrimental to welfare

Chen, Xiaoshan; Leeper, Eric M.; Leith, Campbell B.;
2020
Availability: Link Link
Citations: 1 (based on OpenCitations) Cited By

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7. Optimal time-consistent monetary, fiscal and debt maturity policy

Leeper, Eric M.; Leith, Campbell B.; Liu, Ding;
2019
Type: Graue Literatur; Non-commercial literature; Arbeitspapier; Working Paper;
Availability: Link

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8. Optimal Time-Consistent Monetary, Fiscal and Debt Maturity Policy

abstract

The textbook optimal policy response to an increase in government debt is simple--monetary policy should actively target inflation, and fiscal policy should smooth taxes while ensuring debt sustainability. Such policy prescriptions presuppose an ability to commit. Without that ability, the temptation to use inflation surprises to offset monopoly and tax distortions, as well as to reduce the real value of government debt, creates a state-dependent inflationary bias problem. High debt levels and short-term debt exacerbate the inflation bias. But this produces a debt stabilization bias because the policy maker wishes to deviate from the tax smoothing policies typically pursued under commitment, by returning government debt to steady-state. As a result, the response to shocks in New Keynesian models can be radically different, particularly when government debt levels are high

Leeper, Eric M.; Leith, Campbell B.; Liu, Ding;
2019
Availability: Link Link
Citations: 4 (based on OpenCitations) Cited By

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9. Strategic interactions in U.S. monetary and fiscal policies

Chen, Xiaoshan; Leeper, Eric M.; Leith, Campbell B.;
2022
Type: Article;
Availability: Link Link

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10. Strategic Interactions in U.S. Monetary and Fiscal Policies

abstract

We estimate a model in which fiscal and monetary policy behavior arise from the optimizing behavior of distinct policy authorities, with potentially different welfare functions. Optimal time-consistent policy behavior fits U.S. time series at least as well as rules-based behavior. American policies often do not conform to the conventional mix of conservative monetary policy and debt-stabilizing fiscal policy. Even after the Volcker disinflation, policies did not achieve that conventional mix, as fiscal policy did not act to stabilize debt until the mid 1990s. A credible conservative central bank that follows a time-consistent fiscal policy leader would come close to mimicking the cooperative Ramsey policy. Had that strategic policy mix been in place, American might have avoided the Great Inflation. Enhancing cooperation between policy makers without an ability to commit may be detrimental to welfare

Chen, Xiaoshan; Leeper, Eric M.; Leith, Campbell B.;
2022
Availability: Link

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