Abstract

http://ssrn.com/abstract=1456393
 
 

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Anchoring Fiscal Expectations


Eric M. Leeper


Indiana University at Bloomington - Department of Economics; National Bureau of Economic Research (NBER); Monash University, Department of Economics

August 16, 2009

CAEPR Working Paper No. 015-2009

Abstract:     
In this lecture, I argue that there are remarkable parallels between how monetary and fiscal policies operate on the macro economy and that these parallels are sufficient to lead us to think about transforming fiscal policy and fiscal institutions as many countries have transformed monetary policy and monetary institutions. Making fiscal transparency comparable to monetary transparency requires fiscal authorities to discuss future possible fiscal policies explicitly. Enhanced fiscal transparency can help anchor expectations of fiscal policy and make fiscal actions more predictable and effective. As advanced economies move into a prolonged period of heightened fiscal activity, anchoring fiscal expectations will become an increasingly important aspect of macroeconomic policy.

Number of Pages in PDF File: 46

Keywords: monetary-fiscal policy interactions, sustainability, transparency

JEL Classification: E52, E63, H6

working papers series


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Date posted: August 19, 2009  

Suggested Citation

Leeper, Eric M., Anchoring Fiscal Expectations (August 16, 2009). CAEPR Working Paper No. 015-2009. Available at SSRN: http://ssrn.com/abstract=1456393 or http://dx.doi.org/10.2139/ssrn.1456393

Contact Information

Eric Michael Leeper (Contact Author)
Indiana University at Bloomington - Department of Economics ( email )
304 Wylie Hall
Bloomington, IN 47405-6620
United States
812-855-9157 (Phone)
812-855-3736 (Fax)

National Bureau of Economic Research (NBER)
1050 Massachusetts Avenue
Cambridge, MA 02138
United States
Monash University, Department of Economics ( email )
Wellington Road
Clayton, Victoria 3168
Australia
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