Dai, Meixing and Sidiropoulos, Moïse (2011): Fiscal disciplining effect of central bank opacity: Stackelberg versus Nash equilibrium.
Download (207kB) | Preview
In a Stackelberg equilibrium, central bank opacity has a fiscal disciplining effect in the sense that it induces the government to reduce taxes and public expenditures, leading hence to lower inflation and output distortions. This effect could disappear or be dominated by the direct effect of opacity when the fiscal and monetary authorities play a Nash game.
|Item Type:||MPRA Paper|
|Original Title:||Fiscal disciplining effect of central bank opacity: Stackelberg versus Nash equilibrium|
|Keywords:||Distortionary taxes, output distortions, central bank transparency (opacity), fiscal disciplining effect.|
|Subjects:||E - Macroeconomics and Monetary Economics > E6 - Macroeconomic Policy, Macroeconomic Aspects of Public Finance, Macroeconomic Policy, and General Outlook > E62 - Fiscal Policy
E - Macroeconomics and Monetary Economics > E5 - Monetary Policy, Central Banking, and the Supply of Money and Credit > E58 - Central Banks and Their Policies
E - Macroeconomics and Monetary Economics > E5 - Monetary Policy, Central Banking, and the Supply of Money and Credit > E52 - Monetary Policy
H - Public Economics > H3 - Fiscal Policies and Behavior of Economic Agents > H30 - General
E - Macroeconomics and Monetary Economics > E6 - Macroeconomic Policy, Macroeconomic Aspects of Public Finance, Macroeconomic Policy, and General Outlook > E63 - Comparative or Joint Analysis of Fiscal and Monetary Policy; Stabilization; Treasury Policy
|Date Deposited:||04. Apr 2011 19:57|
|Last Modified:||13. Feb 2013 09:03|
Beetsma, R.M.W.J. and H. Jensen (2003), “Why money talks and wealth wispers: Monetary uncertainty and mystique. A comment,” Journal of Money, Credit, and Banking 35, 129-36.
Brainard, W. (1967), “Uncertainty and the effectiveness of policy,” American Economic Review 57 (2), 411-25.
Ciccarone, Giuseppe, Enrico Marchetti and Giovanni Di Bartolomeo (2007), “Unions, fiscal policy and central bank transparency,” The Manchester School, vol. 75, 617-33.
Hefeker, Carsten and Blandine Zimmer, (2010), “Uncertainty and fiscal policy in an asymmetric monetary union,” Open Economies Review, forthcoming.
Hughes-Hallett, A. and Viegi, N. (2003), “Imperfect transparency and the strategic use of information in monetary policy: An ever present temptation for central bankers”, The Manchester School, 71, 498-520.
Rogoff, K. (1985), “The optimal degree of commitment to a monetary target.” Quarterly Journal of Economics 100(4), 1169–1190.