Optimal fiscal and monetary policy, debt crisis and management / prepared by Cristiano Cantore [and three others].
The initial government debt-to-GDP ratio and the government's commitment play a pivotal role in determining the welfare-optimal speed of fiscal consolidation in the management of a debt crisis. Under commitment, for low or moderate initial government debt-to-GPD ratios, the optimal consolidatio...
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| Online Access: | Electronic book from EBSCO |
|---|---|
| Main Author: | |
| Format: | eBook |
| Language: | English |
| Published: | [Washington, D.C.] : International Monetary Fund, [2017] ©2017 |
| Series: | IMF working paper ;
WP/17/78. |
| Subjects: |
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| 082 | 0 | 4 | |a 336.34 |2 23 |
| 049 | |a LAFW | ||
| 100 | 1 | |a Cantore, Cristiano, |e author. | |
| 245 | 1 | 0 | |a Optimal fiscal and monetary policy, debt crisis and management / |c prepared by Cristiano Cantore [and three others]. |
| 264 | 1 | |a [Washington, D.C.] : |b International Monetary Fund, |c [2017] | |
| 264 | 4 | |c ©2017 | |
| 300 | |a 1 online resource (45 pages) | ||
| 336 | |a text |b txt |2 rdacontent | ||
| 337 | |a computer |b c |2 rdamedia | ||
| 338 | |a online resource |b cr |2 rdacarrier | ||
| 490 | 1 | |a IMF working paper ; |v WP/17/78 | |
| 588 | 0 | |a Print version record. | |
| 505 | 0 | |a Cover; Contents; 1 Introduction; 2 The Model; 2.1 Households; 2.2 Firms; 2.3 Government; 2.4 Monetary policy; 2.5 Equilibrium; 2.6 Functional forms; 3 Calibration; 4 Optimal monetary and fiscal stabilisation policy; 4.1 The Ramsey problem and the LQ approximation; 4.2 Optimal monetary-fiscal rules for normal times; 4.2.1 Results; 4.3 Crisis management of debt: how fast, how deep?; 4.4 The role of nonlinearities, larger shocks and an interest-rate peg; 5 Introducing long-term government debt; 5.1 Results; 6 Conclusions; A Equilibrium conditions; A.1 Utility function and marginal utilities. | |
| 505 | 8 | |a A.2 Consumption/savingA. 3 Investment; A.4 Wage setting; A.5 Production; A.6 Government; A.7 Monetary policy; A.8 Resource constraint; A.9 Autoregressive processes; B The Ramsey problem and the LQ approximation; C Data; D Moments; List of Tables; 1 Parameter values; 2 Optimal policy results for alternative government debt/GDP ratios; 3 Optimal policy results for B/4Y=0.7 allowing for superinertial monetary policy; 4 Optimal policy results for alternative government debt/GDP ratios allowing for long-term government debt; C.1 Data sources; C.2 Data transformations -- observables. | |
| 505 | 8 | |a D.1 Moments of key macroeconomic variablesList of Figures; 1 Gross general government debt (% of GDP) in selected advanced economies (Source: Fiscal Monitor, October 2014, International Monetary Fund); 2 Cumulative density function of the fiscal limit; 3 Effects of a shock to the level of debt under each of the four regimes, and under each of the four debt scenarios; 4 Comparison of responses of linear and nonlinear models for a jump from debt/GDP of 90% to 105%; 5 Comparison of responses in the nonlinear model for a jump of debt/GDP of different magnitudes. | |
| 500 | |a 6 Negative preference shock with an interest rate peg of various lengths7 Effects of a shock to the level of debt under optimal and time-consistent policy, and under each of the four debt scenarios, allowing for long-term government debt. | ||
| 520 | 3 | |a The initial government debt-to-GDP ratio and the government's commitment play a pivotal role in determining the welfare-optimal speed of fiscal consolidation in the management of a debt crisis. Under commitment, for low or moderate initial government debt-to-GPD ratios, the optimal consolidation is very slow. A faster pace is optimal when the economy starts from a high level of public debt implying high sovereign risk premia, unless these are suppressed via a bailout by official creditors. Under discretion, the cost of not being able to commit is reflected into a quick consolidation of government debt. Simple monetary-fiscal rules with passive fiscal policy, designed for an environment with "normal shocks", perform reasonably well in mimicking the Ramsey-optimal response to one-off government debt shocks. When the government can issue also long-term bonds-under commitment-the optimal debt consolidation pace is slower than in the case of short-term bonds only, and entails an increase in the ratio between long and short-term bonds. | |
| 506 | |a Access limited to authorized users. | ||
| 650 | 0 | |a Debts, Public. | |
| 650 | 0 | |a Monetary policy. | |
| 650 | 0 | |a Fiscal policy. | |
| 773 | |t EBSCOhost Ebook Collection. | ||
| 776 | 0 | 8 | |i Print version: |a Cantore, Cristiano. |t Optimal Fiscal and Monetary Policy, Debt Crisis and Management. |d Washington, D.C. : International Monetary Fund, ©2017 |z 9781475590180 |
| 830 | 0 | |a IMF working paper ; |v WP/17/78. | |
| 856 | 4 | 0 | |u http://ezproxy.lafayette.edu/login?url=https://search.ebscohost.com/login.aspx?direct=true&scope=site&db=nlebk&AN=1505065 |z Electronic book from EBSCO |