1. bookVolume 9 (2020): Issue s1 (July 2020)
Journal Details
First Published
11 Mar 2014
Publication timeframe
3 times per year
access type Open Access

Monetary Consequences of Fiscal Stress in a Game Theoretic Framework

Published Online: 16 Jul 2020
Volume & Issue: Volume 9 (2020) - Issue s1 (July 2020)
Page range: 125 - 164
Journal Details
First Published
11 Mar 2014
Publication timeframe
3 times per year

This paper maps Leeper and Walker (2011) model into a game theory framework to study about the strategic aspects of monetary and fiscal interaction under a fiscal stress caused by an ageing population problem. The paper reveals that the outcomes of the game depend on the parameters of the underlying model, the size of the projected transfers and the public inflation expectation. The findings show that commitment to the target (inflation, government transfers) plays a crucial role in the policy interaction.


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