scholarly journals Fiscal and monetary policy interactions: Empirical evidence and optimal policy using a structural New-Keynesian model

2004 ◽  
Vol 26 (2) ◽  
pp. 257-280 ◽  
Author(s):  
V.Anton Muscatelli ◽  
Patrizio Tirelli ◽  
Carmine Trecroci
Keyword(s):  
Monetary Policy ◽  
Empirical Evidence ◽  
Optimal Policy ◽  
New Keynesian ◽  
New Keynesian Model ◽  
Policy Interactions ◽  
Keynesian Model ◽  
Fiscal And Monetary Policy

scholarly journals WOODFORD'S APPROACH TO ROBUST POLICY ANALYSIS IN A LINEAR-QUADRATIC FRAMEWORK

2018 ◽  
Vol 23 (5) ◽  
pp. 1895-1920 ◽  
Author(s):  
Hyosung Kwon ◽  
Jianjun Miao
Keyword(s):  
Monetary Policy ◽  
Optimal Policy ◽  
New Keynesian ◽  
New Keynesian Model ◽  
Perfect Equilibrium ◽  
Optimal Monetary Policy ◽  
Linear Quadratic ◽  
Keynesian Model ◽  
Markov Perfect ◽  
Time Invariant

This paper extends Woodford's approach to the robustly optimal monetary policy to a general linear quadratic framework. We provide algorithms to solve for a time-invariant linear robustly optimal policy in a timeless perspective and for a time-invariant linear Markov perfect equilibrium under discretion. We apply our methods to a New Keynesian model of monetary policy with persistent cost-push shocks and inflation persistence. We find that the robustly optimal commitment inflation is less responsive to a cost-push shock when the shock is more persistent and that the robustly optimal discretionary policy is more responsive to lagged inflation when inflation is more persistent.

scholarly journals Optimal control in the New Keynesian model with monetary and fiscal policy interactions

2021 ◽  
Vol 1864 (1) ◽  
pp. 012040
Author(s):  
T A Alexeeva ◽  
N V Kuznetsov ◽  
T N Mokaev ◽  
I A Polshchikova
Keyword(s):  
Optimal Control ◽  
Fiscal Policy ◽  
New Keynesian ◽  
New Keynesian Model ◽  
Policy Interactions ◽  
Keynesian Model ◽  
Monetary And Fiscal Policy

ARE MAJOR CENTRAL BANKS BLINDED BY THE ANALYTICAL ELEGANCE OF THEIR MODELS? POSSIBLE COSTS OF UNCONVENTIONAL MONETARY POLICY MEASURES

2017 ◽  
Vol 62 (01) ◽  
pp. 87-108 ◽  
Author(s):  
PIOTR CIŻKOWICZ ◽  
ANDRZEJ RZOŃCAZ
Keyword(s):  
Monetary Policy ◽  
Global Financial Crisis ◽  
Significant Risk ◽  
Central Banks ◽  
New Keynesian ◽  
New Keynesian Model ◽  
Unconventional Monetary Policy ◽  
Keynesian Model ◽  
Policy Measures ◽  
The Global Financial Crisis

We survey the possible costs of the unconventional monetary policy measures undertaken by major central banks after the outbreak of the global financial crisis in 2008. We argue that these costs are not easily discernable in the new Keynesian (NK) model, which defines a theoretical framework for monetary policy. First, the costs may result from the effects of unconventional monetary policy measures on the intensity of restructuring and the persistence of uncertainty (which increased after the outbreak of the crisis). However, neither of these processes is considered in the new Keynesian model. Second, costs may be generated not only by distortions in the choices made by economic agents but may also be a result of the decisions made by governments, particularly in terms of the fiscal deficit level. However, the new Keynesian model does not consider the effects of unconventional monetary policy measures on the quality of fiscal policy. Without carefully considering the costs, there is a significant risk that unconventional monetary policy measures could become a conventional response to recurrent crises.

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