期刊名称：Departmental Discussion Papers / University of Glasgow, Department of Economics
出版年度：2001
卷号：1
出版社：University of Glasgow, Department of Economics
摘要：The potential importance of fiscal policy in influencing inflation has recently been highlighted,
following Woodford (1995), under the heading of the ‘Fiscal Theory of the Price Level’ (FTPL). Some
authors have suggested that this theory provides a rationale for the Pact for Stability and Growth as a
necessary condition for the ECB pursuing a policy of price stability. In this paper, we relax the assumptions
underpinning the FTPL by developing a two country open economy model, where each country has
overlapping generations of non-Ricardian consumers who supply labour to imperfectly competitive firms
which can only change their prices infrequently. We examine the case where the two countries have formed
a monetary union, but where the fiscal authorities remain independent. We show that the fiscal response
required to ensure stability of the real debt stock is greater when consumers are not infinitely lived. In
principle, this allows for some compensating behaviour between governments, but we show that the scope
for compensation is small The monetary authority can abandon its active targeting of inflation to stabilise
the debt of at most one fiscal authority, and any other combination of policies will either result in price level
indeterminacy and/or indefinite transfers of wealth between the two economies. Finally, in a series of
simulations we show that fiscal shocks have limited impact on output and inflation provided the fiscal
authorities meet the (weak) requirements of fiscal solvency. However, when monetary policy is forced to
abandon its active targeting of inflation, then fiscal shocks have a much greater impact on both output and
inflation.
关键词：EMU, Stability and Growth Pact, Monetary Policy, Fiscal Policy, Fiscal Theory of
the Price Level
