Monetary and Fiscal Policy Interactions in the Post-war U.S / Susan Yang, Nora Traum.

Format:

Book

Government document

Author/Creator:

Yang, Susan.

Contributor:

Traum, Nora.

Series:

IMF Working Papers; Working Paper ; No. 2010/243

IMF Working Papers

Language:

English

Subjects (All):

Monetary policy--United States.

Monetary policy.

Fiscal policy--United States.

Fiscal policy.

Physical Description:

1 online resource (68 p.)

Place of Publication:

Washington, D.C. : International Monetary Fund, 2010.

Language Note:

English

Summary:

A New Keynesian model allowing for an active monetary and passive fiscal policy (AMPF) regime and a passive monetary and active fiscal policy (PMAF) regime is fit to various U.S. samples from 1955 to 2007. Data in the pre-Volcker periods strongly prefer an AMPF regime, but the estimation is not very informative about whether the inflation coefficient in the interest rate rule exceeds one in pre-Volcker samples. Also, whether a government spending increase yields positive consumption in a PMAF regime depends on price stickiness. An income tax cut can yield a negative labor response if monetary policy aggressively stabilizes output.

Contents:

Cover Page; Title Page; Copyright Page; Contents; I. Introduction; II. Model; A. Firms; B. Labor Packers; C. Households; D. Monetary Policy; E. Fiscal Policy; F. Model Solution; III. Estimation; A. Methodology; B. Prior Distributions; Table 1. Estimates for the prior 1 specification (P1), centered at the active monetary and passive fiscal policy regime; Table 2. Estimates for the prior 2 specification (P2), centered at the passive monetary and active fiscal policy regime; Table 3. Estimates for the prior 3 specification (P3), centered at the passive monetary and active fiscal policy regime

Figure 1. Combinations of various parameters that deliver the AMPF regimeC. Posterior Estimates; Table 4. Standard deviations from data and unconditional standard deviations from the posterior distribution; IV. Regime Analysis; Table 5. Model fit comparisons; Table 6. Standard deviations from the unconditional standard deviations from the prior Distribution; Figure 2. Prior and posterior bivariate density plots; Figure 3. Prior and posterior bivariate density plots; V. Applications; A. The Evolution of Monetary Policy Effects

Figure 4. The effects of monetary policy across samples: all samples under P1Figure 5. The effects of monetary policy across samples: 1955Q1-1966Q4 and 1967Q1-1979Q2 are under P2, and 1984Q1-2007Q4 is under P1; B. Government Spending Increase under a PMAF Regime; Figure 6. The effects of a government spending increase for 1955Q1-1966Q4; Figure 7. The effects of a government spending increase for 1967Q1-1979Q2; C. The Expansionary Effect of an Income Tax Cut; Figure 8. The effects of a tax cut for 1955Q1-1966Q4; Figure 9. The effects of a tax cut for 1967Q1-1979Q2; VI. Conclusions

VII. Appendix: The Equilibrium SystemA. The Stationary Equilibrium; B. The Steady State; C. The Log-Linearized System; VIII. Appendix: Data Description; References; Footnotes

Notes:

"November 2010."

Includes bibliographical references.

Description based on print version record.

ISBN:

9786613865083

9781462314362

1462314368

9781455252688

1455252689

9781283552639

1283552639

9781455210350

1455210358