Report
Optimal fiscal and monetary policy: some recent results
Abstract: This paper studies the quantitative properties of fiscal and monetary policy in business cycle models. In terms of fiscal policy, optimal labor tax rates are virtually constant and optimal capital income tax rates are close to zero on average. In terms of monetary policy, the Friedman rule is optimal?nominal interest rates are zero?and optimal monetary policy is activist in the sense that it responds to shocks to the economy.
Keywords: Monetary policy; Fiscal policy;
Status: Published in Journal of Money, Credit, and Banking (Vol.23, n.3, Part 2, August 1991, pp. 519-539)
Access Documents
File(s): File format is application/pdf http://www.minneapolisfed.org/research/common/pub_detail.cfm?pb_autonum_id=428
Bibliographic Information
Provider: Federal Reserve Bank of Minneapolis
Part of Series: Staff Report
Publication Date: 1991
Number: 147