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...
| Main Authors: | , , , , , |
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| Format: | Article |
| Language: | English |
| Published: |
Public Library of Science (PLoS)
2015-01-01
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| Series: | PLoS ONE |
| Online Access: | http://europepmc.org/articles/PMC4371610?pdf=render |
| _version_ | 1818245677030834176 |
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| author | Mario A Bertella Henio A Rego Celso Neris Jonathas N Silva Boris Podobnik H Eugene Stanley |
| author_facet | Mario A Bertella Henio A Rego Celso Neris Jonathas N Silva Boris Podobnik H Eugene Stanley |
| author_sort | Mario A Bertella |
| collection | DOAJ |
| 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. |
| first_indexed | 2024-12-12T14:36:43Z |
| format | Article |
| id | doaj.art-1d3e87701cce42fdb110f184c0b473bb |
| institution | Directory Open Access Journal |
| issn | 1932-6203 |
| language | English |
| last_indexed | 2024-12-12T14:36:43Z |
| publishDate | 2015-01-01 |
| publisher | Public Library of Science (PLoS) |
| record_format | Article |
| series | PLoS ONE |
| spelling | doaj.art-1d3e87701cce42fdb110f184c0b473bb2022-12-22T00:21:22ZengPublic Library of Science (PLoS)PLoS ONE1932-62032015-01-01103e011891710.1371/journal.pone.0118917Interaction between fiscal and monetary policy in a dynamic nonlinear model.Mario A BertellaHenio A RegoCelso NerisJonathas N SilvaBoris PodobnikH Eugene StanleyThe 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.http://europepmc.org/articles/PMC4371610?pdf=render |
| spellingShingle | Mario A Bertella Henio A Rego Celso Neris Jonathas N Silva Boris Podobnik H Eugene Stanley Interaction between fiscal and monetary policy in a dynamic nonlinear model. PLoS ONE |
| 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 |
| url | http://europepmc.org/articles/PMC4371610?pdf=render |
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