Rogoff revisited: The conservative central banker proposition under active fiscal policies

• Published in: Economics letters Vol. 104; no. 3; pp. 140 - 143
• Main Authors: Hughes Hallett, Andrew, Libich, Jan, Stehlík, Petr
• Format: Journal Article
• Language: English
• Published: Elsevier B.V 01-09-2009; Elsevier
• Series: Economics Letters
• Subjects: Central banks; Conservative central banker; Conservative central banker Monetary and fiscal policy interaction Inflation Deficit Debt; Debt; Deficit; Fiscal policy; Inflation; Monetary and fiscal policy interaction; E61; E63; Inflation; Debt; Conservative central banker; Deficit; Monetary and fiscal policy interaction
• ISSN: 0165-1765; 1873-7374
• DOI: 10.1016/j.econlet.2009.05.005

The paper re-examines Rogoff's [Rogoff, K., 1985. The Optimal Degree of Commitment to an Intermediate Monetary Target. Quarterly Journal of Economics 100, 1169–1189.] influential monetary policy result. It shows that responses of a conservative central banker and the resulting macroeconomic outcomes may be substantially different if interactions with (ambitious) fiscal policy are taken into account.