Is monetary and fiscal policy conflict that dire?

IF 1.9 3区 经济学 Q2 ECONOMICS
Jeremy Kronick , Luba Petersen
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引用次数: 0

Abstract

Theory predicts that inflation can become unstable when policymakers are in conflict about their post-recession recovery strategies, with the fiscal authority actively borrowing and spending to stimulate economic growth while the monetary authority raises interest rates to tame inflation. Such policy conflict can generate a debt-inflation spiral when agents are forward-looking. We show that the dire effects of policy conflict are less concerning when agents form backward-looking expectations. We then test this prediction in a learning-to-forecast experiment. Our results suggest that policy conflict does not necessarily lead to worse economic outcomes. This finding is driven by the fact that agents rely mostly on recent macroeconomic trends to formulate their expectations and do not meaningfully factor the government debt level or future regime shifts into their expectations.
货币政策和财政政策的冲突有那么可怕吗?
理论预测,当政策制定者在衰退后的复苏策略上存在冲突时,通货膨胀可能会变得不稳定,财政当局积极借贷和支出以刺激经济增长,而货币当局则提高利率以抑制通货膨胀。当代理人具有前瞻性时,这种政策冲突可能导致债务-通胀螺旋式上升。我们表明,当代理人形成向后看的期望时,政策冲突的可怕影响就不那么令人担忧了。然后我们在一个学习预测的实验中测试这个预测。我们的研究结果表明,政策冲突并不一定会导致更糟糕的经济结果。这一发现是由这样一个事实所驱动的,即代理人主要依靠最近的宏观经济趋势来制定他们的预期,而不是有意意地将政府债务水平或未来政权转变纳入他们的预期。
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来源期刊
CiteScore
3.10
自引率
10.50%
发文量
199
期刊介绍: The journal provides an outlet for publication of research concerning all theoretical and empirical aspects of economic dynamics and control as well as the development and use of computational methods in economics and finance. Contributions regarding computational methods may include, but are not restricted to, artificial intelligence, databases, decision support systems, genetic algorithms, modelling languages, neural networks, numerical algorithms for optimization, control and equilibria, parallel computing and qualitative reasoning.
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