Optimal money and debt management: Liquidity provision vs tax smoothing
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- 作者：Matthew Canzoneri ; Robert Cumby ; cumbyr@georgetown.edu" class="auth_mail" title="E-mail the corresponding author ; Behzad Diba
- 关键词：Optimal fiscal and monetary policy ; Friedman rule ; Tax smoothing
- 刊名：Journal of Monetary Economics
- 出版年：2016
- 出版时间：October 2016
- 年：2016
- 卷：83
- 期：Complete
- 页码：39-53
- 全文大小：376 K
文摘
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Government bonds provide liquidity to the private sector.
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This changes the conventional wisdom on public debt management in a fundamental way.
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Optimal liquidity provision can conflict with tax smoothing.
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Smoothing distortionary tax rates may not be optimal, even if prices are flexible.
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Unless prices are flexible, optimal policy does not satiate liquidity demand.