This paper investigates the dynamics of the price level in a continuous time monetary version of the Yaari-Blanchard overlapping generations model with capital accumulation. It is shown that there is an interaction between fiscal discipline and price stability when the government budget is intertemporally balanced. Relevant implications are that high debt and slow adjustment adversely affect both prices and capital accumulation.
Annicchiarico, B., Marini, G. (2005). Government deficits, consumption, and the price level. PORTUGUESE ECONOMIC JOURNAL, 4(3), 193-205 [10.1007/s10258-005-0047-1].
Government deficits, consumption, and the price level
ANNICCHIARICO, BARBARA;MARINI, GIANCARLO
2005-01-01
Abstract
This paper investigates the dynamics of the price level in a continuous time monetary version of the Yaari-Blanchard overlapping generations model with capital accumulation. It is shown that there is an interaction between fiscal discipline and price stability when the government budget is intertemporally balanced. Relevant implications are that high debt and slow adjustment adversely affect both prices and capital accumulation.File in questo prodotto:
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