Monetary Policy and Public Finances : Inflation Targets in a New Perspective

This paper considers the interaction between the private sector, the monetary authority, and the fiscal authority, and concludes that unrestricted central bank independence may not be an optimal way to collect seigniorage revenues or stabilize supply shocks. Moreover, the paper shows that the implementation of an optimal inflation target results in optimal shares of government finances-seigniorage, taxes, and the spending shortfall-from society's point of view but still involves suboptimal stabilization. Even if price stability is the sole central bank objective, a positive inflation target has important implications for the government's finances, as well as for stabilization.
Publication date: March 1999
ISBN: 9781451844368
$15.00
Add to Cart by clicking price of the language and format you'd like to purchase
Available Languages and Formats
English
Prices in red indicate formats that are not yet available but are forthcoming.
Topics covered in this book

This title contains information about the following subjects. Click on a subject if you would like to see other titles with the same subjects.

Inflation , Inflation , Policy interaction , public finances , seigniorage , inflation targets , central bank , inflation target , independent central bank

Summary