期刊名称：Departmental Discussion Papers / University of Glasgow, Department of Economics
出版年度：2009
卷号：1
出版社：University of Glasgow, Department of Economics
摘要：Recent attempts to incorporate optimal fiscal policy into New
Keynesian models subject to nominal inertia, have tended to assume that policy
makers are benevolent and have access to a commitment technology. A separate
literature, on the New Political Economy, has focused on real economies where
there is strategic use of policy instruments in a world of political conflict. In
this paper we combine these literatures and assume that policy is set in a New
Keynesian economy by one of two policy makers facing electoral uncertainty (in
terms of infrequent elections and an endogenous voting mechanism). The policy
makers generally share the social welfare function, but differ in their preferences
over fiscal expenditure (in its size and/or composition). Given the environment,
policy shall be realistically constrained to be time-consistent. In a sticky-price
economy, such heterogeneity gives rise to the possibility of one policy maker
utilising (nominal) debt strategically to tie the hands of the other party, and
influence the outcome of any future elections. This can give rise to a deficit bias,
implying a sub-optimally high level of steady-state debt, and can also imply a
sub-optimal response to shocks. The steady-state distortions and inflation bias
this generates, combined with the volatility induced by the electoral cycle in a
sticky-price environment, can significantly raise the costs of having a less than
fully benevolent policy maker.
关键词：New Keynesian Model; Government Debt; Monetary Policy; Fiscal
Policy, Electoral Uncertainty, Time Consistency.
