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Equilibrium Determinacy under Monetary and Fiscal Policies in an Overlapping Generations Model

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  • Alessandro Piergallini

Abstract

This paper studies the issue of equilibrium determinacy under monetary and fiscal policy feedback rules in an optimizing general equilibrium model with overlapping generations and flexible prices. It is shown that equilibria may be determinate also when monetary and fiscal policies are both ‘passive’. In particular, under passive monetary rules, equilibrium uniqueness is more likely to be verified when fiscal policies are less committed to public debt stabilization.

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  • Alessandro Piergallini, 2005. "Equilibrium Determinacy under Monetary and Fiscal Policies in an Overlapping Generations Model," Economic Notes, Banca Monte dei Paschi di Siena SpA, vol. 34(3), pages 313-330, November.
    • Handle: RePEc:bla:ecnote:v:34:y:2005:i:3:p:313-330
    DOI: 10.1111/j.0391-5026.2005.00153.x
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    References listed on IDEAS

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    8. Orphanides, Athanasios, 2003. "Historical monetary policy analysis and the Taylor rule," Journal of Monetary Economics, Elsevier, vol. 50(5), pages 983-1022, July.
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    Cited by:

    1. Dennis Bonam & Jasper Lukkezen, 2019. "Fiscal and Monetary Policy Coordination, Macroeconomic Stability, and Sovereign Risk Premia," Journal of Money, Credit and Banking, Blackwell Publishing, vol. 51(2-3), pages 581-616, March.
    2. Arwiphawee Srithongrung, 2016. "Public finance and monetary policies as economic stabilizer: Unique or universal across countries?," Nóesis. Revista de Ciencias Sociales y Humanidades, Nóesis. Revista de Ciencias Sociales y Humanidades, vol. 25, pages 13-46, 49.
    3. Dennis Bonam & Jasper Lukkezen, 2014. "Fiscal and Monetary Policy Coordination, Macroeconomic Stability, and Sovereign Risk," Tinbergen Institute Discussion Papers 14-006/VI, Tinbergen Institute.

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