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acessibilidade

http://hdl.handle.net/10071/18132
acessibilidade
Title: Do heterogeneous expectations constitute a challenge for policy interaction?
Authors: Gasteiger, E.
Keywords: Fiscal and monetary policy interaction
Heterogeneous expectations
Inflation
Issue Date: 2018
Publisher: Cambridge University Press
Abstract: Yes, indeed; at least for macroeconomic policy interaction. We examine a Neo-Classical economy and provide the conditions for policy arrangements to successfully stabilize the economy when agents have either rational or adaptive expectations. For a contemporaneous-data monetary policy rule, the monetarist solution is unique and stationary under a passive fiscal/active monetary policy regime if monetary policy appropriately incorporates expectational heterogeneity. In contrast, the active fiscal/passive monetary policy regime's fiscalist solution is prone to explosiveness due to empirically plausible expectational heterogeneity. Nevertheless, this can be a well-defined, rather orthodox equilibrium. For operational monetary policy rules, only the results for the fiscalist solution prevail. Moreover, our results are plausible from an adaptive learning viewpoint.
Peer reviewed: yes
URI: http://hdl.handle.net/10071/18132
DOI: 10.1017/S1365100516001036
ISSN: 1365-1005
Ciência-IUL: https://ciencia.iscte-iul.pt/id/ci-pub-40519
Accession number: WOS:000453387500008
Appears in Collections:BRU-RI - Artigos em revistas científicas internacionais com arbitragem científica

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