Political shocks and public debt: The case for a conservative central bank revisited

被引:2
|
作者
Beetsma, Roel M. W. J.
Bovenberg, A. Lans
机构
[1] Univ Amsterdam, Dept Econ, CEPR, NL-1018 WB Amsterdam, Netherlands
[2] Tilburg Univ, NL-5000 LE Tilburg, Netherlands
来源
关键词
political shocks; public debt; commitment; discretion; central bank conservatism; targets;
D O I
10.1016/j.jedc.2005.05.009
中图分类号
F [经济];
学科分类号
02 ;
摘要
We explore the dynamics of public debt and optimal institutions in the presence of political shocks arising from electoral uncertainty. Under commitment, optimal stabilization is established by combining an inflation target with a debt target. The inflation target should be contingent on the political shocks while the debt target forces the government to fully absorb the political shocks in the period in which it occurs. In the absence of such inflation and debt targets but with monetary commitment, a conservative central bank enhances stabilization. An even more conservative central bank is optimal if monetary policy cannot commit. (c) 2005 Elsevier B.V. All rights reserved.
引用
收藏
页码:1857 / 1883
页数:27
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