Interaction between Fiscal and Monetary Policy in a Dynamic Nonlinear Model

The objective of this study is to verify the dynamics between fiscal policy, measured by public debt, and monetary policy, measured by a reaction function of a central bank. Changes in monetary policies due to deviations from their targets always generate fiscal impacts. We examine two policy reacti...

Descripción completa

Detalles Bibliográficos
Autores principales: Bertella, Mario A., Rego, Henio A., Neris, Celso, Silva, Jonathas N., Podobnik, Boris, Stanley, H. Eugene
Formato: Online Artículo Texto
Lenguaje:English
Publicado: Public Library of Science 2015
Materias:
Research Article
Acceso en línea:https://www.ncbi.nlm.nih.gov/pmc/articles/PMC4371610/
https://www.ncbi.nlm.nih.gov/pubmed/25799581
http://dx.doi.org/10.1371/journal.pone.0118917
_version_ 1782363064860934144
author Bertella, Mario A.
Rego, Henio A.
Neris, Celso
Silva, Jonathas N.
Podobnik, Boris
Stanley, H. Eugene
author_facet Bertella, Mario A.
Rego, Henio A.
Neris, Celso
Silva, Jonathas N.
Podobnik, Boris
Stanley, H. Eugene
author_sort Bertella, Mario A.
collection PubMed
description The objective of this study is to verify the dynamics between fiscal policy, measured by public debt, and monetary policy, measured by a reaction function of a central bank. Changes in monetary policies due to deviations from their targets always generate fiscal impacts. We examine two policy reaction functions: the first related to inflation targets and the second related to economic growth targets. We find that the condition for stable equilibrium is more restrictive in the first case than in the second. We then apply our simulation model to Brazil and United Kingdom and find that the equilibrium is unstable in the Brazilian case but stable in the UK case.
format Online
Article
Text
id pubmed-4371610
institution National Center for Biotechnology Information
language English
publishDate 2015
publisher Public Library of Science
record_format MEDLINE/PubMed
spelling pubmed-43716102015-04-24 Interaction between Fiscal and Monetary Policy in a Dynamic Nonlinear Model Bertella, Mario A. Rego, Henio A. Neris, Celso Silva, Jonathas N. Podobnik, Boris Stanley, H. Eugene PLoS One Research Article The objective of this study is to verify the dynamics between fiscal policy, measured by public debt, and monetary policy, measured by a reaction function of a central bank. Changes in monetary policies due to deviations from their targets always generate fiscal impacts. We examine two policy reaction functions: the first related to inflation targets and the second related to economic growth targets. We find that the condition for stable equilibrium is more restrictive in the first case than in the second. We then apply our simulation model to Brazil and United Kingdom and find that the equilibrium is unstable in the Brazilian case but stable in the UK case. Public Library of Science 2015-03-23 /pmc/articles/PMC4371610/ /pubmed/25799581 http://dx.doi.org/10.1371/journal.pone.0118917 Text en © 2015 Bertella et al http://creativecommons.org/licenses/by/4.0/ This is an open-access article distributed under the terms of the Creative Commons Attribution License, which permits unrestricted use, distribution, and reproduction in any medium, provided the original author and source are properly credited.
spellingShingle Research Article
Bertella, Mario A.
Rego, Henio A.
Neris, Celso
Silva, Jonathas N.
Podobnik, Boris
Stanley, H. Eugene
Interaction between Fiscal and Monetary Policy in a Dynamic Nonlinear Model
title Interaction between Fiscal and Monetary Policy in a Dynamic Nonlinear Model
title_full Interaction between Fiscal and Monetary Policy in a Dynamic Nonlinear Model
title_fullStr Interaction between Fiscal and Monetary Policy in a Dynamic Nonlinear Model
title_full_unstemmed Interaction between Fiscal and Monetary Policy in a Dynamic Nonlinear Model
title_short Interaction between Fiscal and Monetary Policy in a Dynamic Nonlinear Model
title_sort interaction between fiscal and monetary policy in a dynamic nonlinear model
topic Research Article
url https://www.ncbi.nlm.nih.gov/pmc/articles/PMC4371610/
https://www.ncbi.nlm.nih.gov/pubmed/25799581
http://dx.doi.org/10.1371/journal.pone.0118917
work_keys_str_mv AT bertellamarioa interactionbetweenfiscalandmonetarypolicyinadynamicnonlinearmodel
AT regohenioa interactionbetweenfiscalandmonetarypolicyinadynamicnonlinearmodel
AT neriscelso interactionbetweenfiscalandmonetarypolicyinadynamicnonlinearmodel
AT silvajonathasn interactionbetweenfiscalandmonetarypolicyinadynamicnonlinearmodel
AT podobnikboris interactionbetweenfiscalandmonetarypolicyinadynamicnonlinearmodel
AT stanleyheugene interactionbetweenfiscalandmonetarypolicyinadynamicnonlinearmodel

Ejemplares similares