Template-type: ReDIF-Paper 1.0
Author-Name: Luis Alberto Alonso González
Author-Workplace-Name: Departamento de Economía Aplicada, Pública y Política. Universidad Complutense de Madrid.
Author-Workplace-Homepage: https://www.ucm.es/eapp
Author-Name: Pilar García Martínez 
Author-Workplace-Name: Facultad de Ciencias Económics y Empresariales. Universidad Complutense de Madrid.
Title: Central Bank independence: Taylor rule and fiscal policy 
Abstract: In this article we will show that independence is not enough to impose a given inflation target when the Central Bank is 
	following a Taylor rule, moreover in such a case, the fiscal authority will be able to set a different objective from the one 
	sought by the monetary authority. On the other hand, if the fiscal authority is acting in accordance with a rule in which 
	there is a estimated equilibrium expenditure G* similar to the estimated real interest rate r* in the Taylor rule, neither the 
	government will be able to establish its inflation target value. In this sense, the type of rule that the economic authorities 
	implement is essential for stabilization purposes. The different periods of implementation in fiscal and monetary policy are 
	taken into account although they did not change the main conclusions.
Keywords: Banco Central, Reglas de Taylor.
Length: 17 pages
Creation-Date: 2004 
Number: 04-01
X-File-Ref: http://america.sim.ucm.es/repec/ucm/ref/doctra04-01.txt
File-URL: https://eprints.ucm.es/id/eprint/6817/1/0401.pdf
File-Format: Application/pdf
Handle: RePEc:ucm:doctra:04-01