Strategic Interactions between an Independent Central Bank and a Myopic Government with Government Debt »
Series: IMF Working Papers
Author(s): Sven Jari Stehn , and David Vines
Publisher: INTERNATIONAL MONETARY FUND
Publication Date: 01 July 2008
Keywords: Monetary and Fiscal Policy, Policy Myopia, Non-cooperative games, Stabilisation Bias, inflation, central bank, monetary policy, aggregate demand, high interest rates,
We analyse optimal discretionary games between a benevolent central bank and a myopic government in a New Keynesian model. First, when lump-sum taxes are available and public debt is absent, we show that a Nash gam...