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Optimal Simple Monetary and Fiscal Rules under Limited Asset Market Participation

Research output: Contribution to Journal/Magazine › Journal article › peer-review

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Optimal Simple Monetary and Fiscal Rules under Limited Asset Market Participation. / Motta, Giorgio; Tirelli, Patrizio.
In: Journal of Money, Credit and Banking, Vol. 44, No. 7, 10.2012, p. 1351–1374.

Research output: Contribution to Journal/Magazine › Journal article › peer-review

Harvard

Motta, G & Tirelli, P 2012, 'Optimal Simple Monetary and Fiscal Rules under Limited Asset Market Participation', Journal of Money, Credit and Banking, vol. 44, no. 7, pp. 1351–1374. https://doi.org/10.1111/j.1538-4616.2012.00535.x

APA

Motta, G., & Tirelli, P. (2012). Optimal Simple Monetary and Fiscal Rules under Limited Asset Market Participation. Journal of Money, Credit and Banking, 44(7), 1351–1374. https://doi.org/10.1111/j.1538-4616.2012.00535.x

Vancouver

Motta G, Tirelli P. Optimal Simple Monetary and Fiscal Rules under Limited Asset Market Participation. Journal of Money, Credit and Banking. 2012 Oct;44(7):1351–1374. Epub 2012 Sept 19. doi: 10.1111/j.1538-4616.2012.00535.x

Author

Motta, Giorgio ; Tirelli, Patrizio. / Optimal Simple Monetary and Fiscal Rules under Limited Asset Market Participation. In: Journal of Money, Credit and Banking. 2012 ; Vol. 44, No. 7. pp. 1351–1374.

Bibtex

@article{9b1b24765bbc4eab99f2ec9f04faea3e,
title = "Optimal Simple Monetary and Fiscal Rules under Limited Asset Market Participation",
abstract = "The combination of limited asset market participation and consumption habits generates indeterminacy for empirically plausible calibrations of a business cycle model characterized by price and nominal wage rigidities. Equilibrium determinacy is restored by demand management policies based on simple fiscal rules. In this regard, fiscal control of nominal income growth is particularly effective. In addition the complementarity between the Taylor rule and the fiscal feedback on nominal income growth produces relatively large welfare gains, limiting both aggregate and intragroup volatilities.",
keywords = "rule of thumb consumers, DSGE, determinacy, limited asset market participation, Taylor principle, optimal simple rule, automatic stabilizers",
author = "Giorgio Motta and Patrizio Tirelli",
year = "2012",
month = oct,
doi = "10.1111/j.1538-4616.2012.00535.x",
language = "English",
volume = "44",
pages = "1351–1374",
journal = "Journal of Money, Credit and Banking",
issn = "0022-2879",
publisher = "Wiley-Blackwell",
number = "7",

}

RIS

TY - JOUR

T1 - Optimal Simple Monetary and Fiscal Rules under Limited Asset Market Participation

AU - Motta, Giorgio

AU - Tirelli, Patrizio

PY - 2012/10

Y1 - 2012/10

N2 - The combination of limited asset market participation and consumption habits generates indeterminacy for empirically plausible calibrations of a business cycle model characterized by price and nominal wage rigidities. Equilibrium determinacy is restored by demand management policies based on simple fiscal rules. In this regard, fiscal control of nominal income growth is particularly effective. In addition the complementarity between the Taylor rule and the fiscal feedback on nominal income growth produces relatively large welfare gains, limiting both aggregate and intragroup volatilities.

AB - The combination of limited asset market participation and consumption habits generates indeterminacy for empirically plausible calibrations of a business cycle model characterized by price and nominal wage rigidities. Equilibrium determinacy is restored by demand management policies based on simple fiscal rules. In this regard, fiscal control of nominal income growth is particularly effective. In addition the complementarity between the Taylor rule and the fiscal feedback on nominal income growth produces relatively large welfare gains, limiting both aggregate and intragroup volatilities.

KW - rule of thumb consumers

KW - DSGE

KW - determinacy

KW - limited asset market participation

KW - Taylor principle

KW - optimal simple rule

KW - automatic stabilizers

U2 - 10.1111/j.1538-4616.2012.00535.x

DO - 10.1111/j.1538-4616.2012.00535.x

M3 - Journal article

VL - 44

SP - 1351

EP - 1374

JO - Journal of Money, Credit and Banking

JF - Journal of Money, Credit and Banking

SN - 0022-2879

IS - 7

ER -