期刊名称：Departmental Discussion Papers / University of Glasgow, Department of Economics
出版年度：2006
卷号：1
出版社：University of Glasgow, Department of Economics
摘要：This paper develops a small New Keynesian model with capital accumulation and
government debt dynamics. The paper discusses the design of simple monetary and
fiscal policy rules consistent with determinate equilibrium dynamics in the absence of
Ricardian equivalence. Under this assumption, government debt turns into a relevant
state variable which needs to be accounted for in the analysis of equilibrium dynamics.
The key analytical finding is that without explicit reference to the level of government
debt it is not possible to infer how strongly the monetary and fiscal instruments should
be used to ensure determinate equilibrium dynamics. Specifically, we identify in our
model discontinuities associated with threshold values of steady-state debt, leading
to qualitative changes in the local determinacy requirements. These features extend
the logic of Leeper (1991) to an environment in which fiscal policy is non-neutral and
requires us to pay equal attention to to monetary and fiscal policy in designing policy
rules consistent with determinate dynamics.
