JOINT VIENNA MACROECONOMICS SEMINAR	INVITATION
R E M I N D E R The Joint Vienna Institute and the Department of Economics and Finance at the Institute for Advanced Studies cordially invite you to the following Joint Vienna Macroeconomics Seminar Tuesday, April 12, 2016 Institute for Advanced Studies Josefstädter Straße 39, 1080 Vienna Lecture Room E02, ground floor 5:00 pm Luisa Lambertini EPFL, Lausanne Monetary Commitment and the Level of Public Debt Abstract: We analyze the interaction between committed monetary and discretionary fiscal policy in a model with public debt, endogenous government expenditure, distortive taxation, and nominal rigidities. Fiscal decisions lack commitment but are Markov-perfect. Monetary commitment to an interest-rate path leads to a unique level of debt. This level of debt is positive if the central bank adopts closed-loop strategies that raise the real rate when inflation is above target due to fiscal deviations; more aggressive defense of the inflation target implies lower debt and higher welfare. Simple Taylor-type interest-rate rules achieve welfare levels similar to sophisticated closed-loop strategies. paper jointly with Stefano Gnocchi We are looking forward to seeing you! Institute for Advanced Studies Josefstädter Straße 39, 1080 Vienna, Austria Tel.: +43 1 599 91 145 e-Mail: economics@ihs.ac.at http://economics.ihs.ac.at		LINKS DIRECTIONS TO IHS on Google maps JOINT VIENNA MACRO SEMINAR on Google calendar ECONOMICS SEMINARS IN VIENNA on Google calendar Institute for Advanced Studies @IHS_Vienna
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