Reflections on the Fiscal Theory of the Price Level

Philippe Weil (1)

1 OFCE - Observatoire français des conjonctures économiques (Sciences Po)

In a world in which consumers correctly expect that both Ricardian and non-Ricardian policy regimes are possible in the future, the fiscal theory of the price level is valid, yet the price is indeterminate. This result does not rely on imposing that the initial stock of nominal bonds be strictly positive, and it does not require a surprise ex post revaluation of nominal assets.

Domaines: Economies et finances

Philippe Weil. Reflections on the Fiscal Theory of the Price Level. 33rd Konstanz Seminar on Monetary Theory and Policy, Jan 2002, Konstanz, Germany. pp.1-14. ⟨hal-01053541⟩