Template-type: ReDif-Paper 1.0
Author-Name: Beetsma Roel M.W.J.
Author-Name: Bovenberg A. Lans
Author-workplace-name: METEOR
Title: The role of public debt in the game of double chicken
Abstract: This paper explores how debt accumulation is affected by the strategic interactions between monetary and fiscal authorities. To achieve the second best with a dependent central bank, the government needs to be made both more conservative and more impatient. However, in the absence of political distortions, an optimally designed conservative, independent central bank is sufficient to establish the second best. In the presence of political distortions, however, also an optimal debt target is needed. Keywords: Central bank independence, price stability weights, (optimal) debt targets, strategic debt management, political distortions, optimal preferences.
Keywords: public economics ; 
Series: Research Memoranda
Creation-Date: 1995
Number: 025
File-URL: http://digitalarchive.maastrichtuniversity.nl/fedora/objects/guid:f24b550f-735e-4581-929e-c6634ccd5d6c/datastreams/ASSET1/content
File-Format: application/pdf
File-Size: 526163
Handle: RePEc:unm:umamet:1995025