We develop the theory of price-level determination in a range of models using both ad hoc
policy rules and jointly optimal monetary and fiscal policies and discuss empirical issues that …

The purpose of this paper is to discuss some of the models used in New Monetarist
Economics, which is our label for a body of recent work on money, banking, payments …

This paper develops a dynamic infinite-horizon model with two layers of governments to
study theoretically and quantitatively how fiscal decentralization affects local and central …

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 …

Increasing the independence of a central bank from political influence, although ex-ante
socially beneficial and initially successful in reducing inflation, would ultimately fail to lower …

In this paper, we study the interactions between fiscal and monetary policy in a frictional
economy where fiat money, bank deposits and short-term and long-term nominal …

We analyze how trading in secondary markets for public debt changes the inherent links
between monetary and fiscal policy, by studying both inflation and debt dynamics. When …

I model a stochastic non‐cooperative game between an independent central bank and a
treasury and study optimal time‐consistent policy in the context of demand‐driven …

How does the presence of sovereign risk affect the conduct of public policy? To answer this
question, this paper studies optimal monetary and fiscal policy without commitment for a …

We study the monetary instrument problem in a dynamic noncooperative game between
separate, discretionary, fiscal and monetary policy makers. We show that monetary …