Anchors aweigh: how fiscal policy can undermine 'good' monetary policy

Anchors aweigh: how fiscal policy can undermine 'good' monetary policy

Policymakers have long understood that if fiscal policy runs amuck and monetary policy is forced to raise seigniorage revenues big inflations result. Latin American policymakers understand this outcome better than most. This message is implicit in Cagan’s (1956) initial study of hyperinflation and t...

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Autor principal: Leeper, Eric M.
Formato: Artículo
Lenguaje:eng
Publicado: Banco Central de Chile 2019
Materias:
POLÍTICA FISCAL
POLÍTICA MONETARIA
INFLACIÓN
Acceso en línea:https://hdl.handle.net/20.500.12580/3885
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spelling oai-20.500.12580-38852021-04-24T11:16:13Z Anchors aweigh: how fiscal policy can undermine 'good' monetary policy Leeper, Eric M. POLÍTICA FISCAL POLÍTICA MONETARIA INFLACIÓN Policymakers have long understood that if fiscal policy runs amuck and monetary policy is forced to raise seigniorage revenues big inflations result. Latin American policymakers understand this outcome better than most. This message is implicit in Cagan’s (1956) initial study of hyperinflation and the message is explicit in Sargent and Wallace’s (1981) theoretical analysis of how monetary policy can lose control of inflation and in Sargent’s (1983) interpretation of historical episodes of high inflations. The message is forcefully promulgated by international economic organizations that prescribe policy reforms to troubled economies. Underlying this view is the notion that if central bankers display sufficient resolve and stick to their inflation-fighting guns fiscal policy will eventually relent and reform. Unfortunately wishing it were so does not make it so. 2019-11-01T00:05:14Z 2019-11-01T00:05:14Z 2011 Artículo 978-956-7421-35-0 https://hdl.handle.net/20.500.12580/3885 eng Series on Central Banking Analysis and Economic Policies no. 16 Attribution-NonCommercial-NoDerivs 3.0 Chile http://creativecommons.org/licenses/by-nc-nd/3.0/cl/ .pdf Sección o Parte de un Documento p. 411-453 application/pdf Banco Central de Chile
institution Banco Central
collection Banco Central
language eng
topic POLÍTICA FISCAL
POLÍTICA MONETARIA
INFLACIÓN
spellingShingle POLÍTICA FISCAL
POLÍTICA MONETARIA
INFLACIÓN
Leeper, Eric M.
Anchors aweigh: how fiscal policy can undermine 'good' monetary policy
description Policymakers have long understood that if fiscal policy runs amuck and monetary policy is forced to raise seigniorage revenues big inflations result. Latin American policymakers understand this outcome better than most. This message is implicit in Cagan’s (1956) initial study of hyperinflation and the message is explicit in Sargent and Wallace’s (1981) theoretical analysis of how monetary policy can lose control of inflation and in Sargent’s (1983) interpretation of historical episodes of high inflations. The message is forcefully promulgated by international economic organizations that prescribe policy reforms to troubled economies. Underlying this view is the notion that if central bankers display sufficient resolve and stick to their inflation-fighting guns fiscal policy will eventually relent and reform. Unfortunately wishing it were so does not make it so.
format Artículo
author Leeper, Eric M.
author_facet Leeper, Eric M.
author_sort Leeper, Eric M.
title Anchors aweigh: how fiscal policy can undermine 'good' monetary policy
title_short Anchors aweigh: how fiscal policy can undermine 'good' monetary policy
title_full Anchors aweigh: how fiscal policy can undermine 'good' monetary policy
title_fullStr Anchors aweigh: how fiscal policy can undermine 'good' monetary policy
title_full_unstemmed Anchors aweigh: how fiscal policy can undermine 'good' monetary policy
title_sort anchors aweigh: how fiscal policy can undermine 'good' monetary policy
publisher Banco Central de Chile
publishDate 2019
url https://hdl.handle.net/20.500.12580/3885
work_keys_str_mv AT leeperericm anchorsaweighhowfiscalpolicycanunderminegoodmonetarypolicy
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