Price level targeting with strategic fiscal policy and the value of fiscal leadership

This paper investigate the stabilization bias that arises in a model of non-cooperative monetary and fiscal policy stabilisation of the economy, when monetary authority implements price level targeting but fiscal policy remains benevolent. We demonstrate the gain in welfare improvement depends on the level of steady state debt. If the steady state level of the government debt is low, then the monetary price level targeting unambiguously leads to social welfare gains, even if the fiscal authority acts strategically and faces different objectives and has incentives to pursue its own benefit and therefore offsets some or all of monetary policy actions. Moreover, if the fiscal policymaker is able to conduct itself as an intra-period leader, the social welfare gain of the monetary price level targeting regime can be further improved. However, if the economy has a high steady state debt level, the gain of the price level targeting is outweighed by the loss arising from the conflicts between the policy makers, and leads to a lower social welfare than under cooperative discretionary inflation targeting

Infrequent fiscal stabilization

This paper studies discretionary non-cooperative monetary and …fiscal policy stabilization in a New Keynesian model, where the …fiscal policymaker uses a distortionary tax as the policy instrument and operates with long periods between optimal time-consistent adjustments of the instrument. We demonstrate that longer …fiscal cycles result in stronger complementarities between the optimal actions of the monetary and …fiscal policymakers. When the …fiscal cycle is not very long, the complementarities lead to expectation traps. However, with a sufficiently long …fiscal cycle –one year in our model –no learnable time-consistent equilibrium exists. Constraining the …fiscal policymaker in its actions may help to avoid these adverse effects

Essays on Interaction Between Monetary and Fiscal Policy

This thesis consists of three essays on the discretionary interactions of fiscal and monetary policy authorities when they stabilise a single economy against shocks in the dynamic setting. In the first essay, I investigate the stabilization bias that arises in a model of noncooperative monetary and fiscal policy stabilisation of the economy, when the monetary authority implements price level targeting but fiscal authority remains benevolent. I demonstrate that the gain in welfare depends on the level of steady state debt. If the steady state level of the government debt is relatively low, then the monetary price level targeting unambiguously leads to social welfare gains, even if the fiscal authority acts strategically and faces different objectives and has incentives to pursue its own benefit and therefore may offset some or all of monetary policy actions. Moreover, if the fiscal policymaker is able to conduct itself as an intra-period leader then the social welfare gain of the monetary price level targeting regime can be further improved. However, if the economy has a relatively high steady state debt level, the gain of the price level targeting is outweighed by the loss arising from the conflicts between the policy makers, and such policy leads to a lower social welfare than under the cooperative discretionary inflation targeting. In the second essay I study the macroeconomic effect of the interaction between discretionary monetary policy which re-optimises every period and discretionary fiscal policy which reoptimises less frequently. I demonstrate the existence of two discretionary equilibria if the frequency of fiscal policy re-optimizes annually while monetary policy adjusts quarterly. Following a disturbance to the debt level, the economy can be stabilised either in a ‘fast but volatile‘ or ‘slow but smooth’ way, where both dynamic paths satisfy the conditions of optimality and time-consistency. I study several delegation regimes and demonstrate that the policy of partial targeting the debt level results in far worse welfare outcomes relative to a strict inflation targeting policy. In the third essay, I extend the framework developed in the second essay to the case with Blanchard-Yaari type of consumers. This brings in two effects. First, an increase in debt results in higher consumption via the wealth effect, the marginal cost is higher so the need for higher interest rate and higher taxation will increase, therefore the dynamic complementarity between actions of the two policymakers become stronger. Second, higher inflation affects consumption via the average propensity to consume and this effect is likely to weaken the dynamic complementarity. I show that when the households are assigned a mortality rate, overall the first effect dominates the second. The transition paths of the economic variables back to the steady state will be more volatile and the multiple equilibriums are more likely to arise

Research on Regional Imbalance of Cross-Border E-Commerce --Take Fujian Free Trade Zone as an Example

This article takes the information data era, world trade, and the deep integration of the “Belt and Road” policy as the background. Using questionnaires and compare to analyze the cross-border e-commerce regional issues in Fujian Free Trade Area, based on the analysis of cross-border e-commerce differences between Fujian, Shanghai and Zhengzhou and the comparative analysis of crossborder e-commerce platforms, it establishes a cross-border e-commerce service quality gap model to further identify problems. This article points out the current development trend of cross-border e-commerce zone in Fujian Free Trade Area, and the problems and the development shortcomings. Utilizing the advantages of cross-border e-commerce and its platform in Shanghai and Zhengzhou Free Trade Area to improve the imbalance of cross-border e-commerce in the Fujian Free Trade Zone, It has come up with actions and recommendations for building a multi-level network, an open credit platform, and a service quality evaluation system

An ankle rehabilitation robot based on 3-RRS spherical parallel mechanism

This article presents the design modeling of a novel 3-RRS spherical parallel mechanism for ankle rehabilitation applications. The kinematics of the 3-RRS spherical parallel mechanism is established. The degree of freedom of 3-RRS spherical parallel mechanism is calculated using screw theory. The inverse kinematics of 3-RRS spherical parallel mechanism is solved. Eight groups of inverse solutions of 3-RRS spherical parallel mechanism are obtained. A method for forward position analysis is developed with variation and iteration approaches, which is suitable for motor position control. The ankle rehabilitation robot can be widely used in clinical treatment and can also be used at home, hotels, and fitness centers for ankle muscle relaxation.</p

Fiscal stabilization vs. passivity

Fiscal policies that stabilize debt may not provide the fiscal backing necessary for monetary policy to successfully target inflation. Appropriate backing is provided by passive fiscal behavior. Understanding the distinction between stabilizing and passive fiscal policies is central to the design of fiscal rules

Collective Flows in a Transport Approach

We introduce a transport approach at fixed shear viscosity to entropy ratio \etas to study the generation of collective flows in ultra-relativistic heavy-ion collisions. Transport theory supplies a covariant approach valid also at large \etas and at intermediate transverse momentum $p_T$, where deviations from equilibrium is no longer negligible. Such an approach shows that at RHIC energies a temperature dependent \etas enhances significantly the $v_4/v_2^2$ respect to the case of constant \etas. Furthermore if NJL chiral dynamics is self-consistently implemented we show that it does not modify the relation between $v_2$ and \etas.Comment: 4 pages, 4 figures, Proceedings of Hot Quarks 2010, 21-26 June 2010 Las Londe Les Maures; to appear in Journal of Physics: Conference Serie