000			02835cam a22003377 4500
001			w10840
003			NBER
005			20211020112704.0
006			m o d
007			cr cnu||||||||
008			210910s2004 mau fo 000 0 eng d
100	1		_aEggertsson, Gauti B. _99788
245	1	0	_aOptimal Monetary and Fiscal Policy in a Liquidity Trap / _cGauti B. Eggertsson, Michael Woodford.
260			_aCambridge, Mass. _bNational Bureau of Economic Research _c2004.
300			_a1 online resource: _billustrations (black and white);
490	1		_aNBER working paper series _vno. w10840
500			_aOctober 2004.
520	3		_aIn previous work (Eggertsson and Woodford, 2003), we characterized the optimal conduct of monetary policy when a real disturbance causes the natural rate of interest to be temporarily negative, so that the zero lower bound on nominal interest rates binds, and showed that commitment to a history-dependent policy rule can greatly increase welfare relative to the outcome under a purely forward-looking inflation target. Here we consider in addition optimal tax policy in response to such a disturbance, to determine the extent to which fiscal policy can help to mitigate the distortions resulting from the zero bound, and to consider whether a history-dependent monetary policy commitment continues to be important when fiscal policy is appropriately adjusted. We find that even in a model where complete tax smoothing would be optimal as long as the zero bound never binds, it is optimal to temporarily adjust tax rates in response to a binding zero bound; but when taxes have only a supply-side effect, the optimal policy requires that the tax rate be raised during the "trap", while committing to lower tax rates below their long-run level later. An optimal policy commitment is still history-dependent, in general, but the gains from departing from a strict inflation target are modest in the case that fiscal policy responds to the real disturbance in an appropriate way.
530			_aHardcopy version available to institutional subscribers
538			_aSystem requirements: Adobe [Acrobat] Reader required for PDF files.
538			_aMode of access: World Wide Web.
588	0		_aPrint version record
690		7	_aE52 - Monetary Policy _2Journal of Economic Literature class.
690		7	_aE63 - Comparative or Joint Analysis of Fiscal and Monetary Policy • Stabilization • Treasury Policy _2Journal of Economic Literature class.
700	1		_aWoodford, Michael. _922998
710	2		_aNational Bureau of Economic Research.
830		0	_aWorking Paper Series (National Bureau of Economic Research) _vno. w10840.
856	4	0	_uhttps://www.nber.org/papers/w10840
856			_yAcceso en línea al DOI _uhttp://dx.doi.org/10.3386/w10840
942			_2ddc _cW-PAPER
999			_c337326 _d295888