Abstract
This paper analyzes the interaction between monetary and fiscal authorities under incomplete information. The inflation goal of the central bank is assumed to be unknown to the fiscal authority and the public. The central bank signals the goal by choosing the first-period monetary policy before the fiscal authority joins the policy-making game. If the central bank would like the fiscal authority and the public to believe that it is wet (dry), the central bank would distort the money supply upward (downward) in order to reveal its actual type.
| Original language | English |
|---|---|
| Pages (from-to) | 202-217 |
| Number of pages | 16 |
| Journal | Japanese Economic Review |
| Volume | 61 |
| Issue number | 2 |
| DOIs | |
| Publication status | Published - Jun 2010 |
| Externally published | Yes |
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ASJC Scopus subject areas
- Economics and Econometrics
Cite this
Interaction between monetary and fiscal authorities under incomplete information. / Sawaki, Hisashi.
In: Japanese Economic Review, Vol. 61, No. 2, 06.2010, p. 202-217.Research output: Contribution to journal › Article
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TY - JOUR
T1 - Interaction between monetary and fiscal authorities under incomplete information
AU - Sawaki, Hisashi
PY - 2010/6
Y1 - 2010/6
N2 - This paper analyzes the interaction between monetary and fiscal authorities under incomplete information. The inflation goal of the central bank is assumed to be unknown to the fiscal authority and the public. The central bank signals the goal by choosing the first-period monetary policy before the fiscal authority joins the policy-making game. If the central bank would like the fiscal authority and the public to believe that it is wet (dry), the central bank would distort the money supply upward (downward) in order to reveal its actual type.
AB - This paper analyzes the interaction between monetary and fiscal authorities under incomplete information. The inflation goal of the central bank is assumed to be unknown to the fiscal authority and the public. The central bank signals the goal by choosing the first-period monetary policy before the fiscal authority joins the policy-making game. If the central bank would like the fiscal authority and the public to believe that it is wet (dry), the central bank would distort the money supply upward (downward) in order to reveal its actual type.
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UR - http://www.scopus.com/inward/citedby.url?scp=77954137212&partnerID=8YFLogxK
U2 - 10.1111/j.1468-5876.2009.00483.x
DO - 10.1111/j.1468-5876.2009.00483.x
M3 - Article
VL - 61
SP - 202
EP - 217
JO - Japanese Economic Review
JF - Japanese Economic Review
SN - 1352-4739
IS - 2
ER -