Fiscal and Monetary Policy Interaction (Valli & Carvalho)

“Fiscal and Monetary Policy Interaction: a simulation based analysis of a two-country New Keynesian DSGE model with heterogeneous households” by Marcos Valli e Fabia A. de Carvalho. “This paper models a fiscal policy that pursues primary balance targets to stabilize the debt-to-GDP ratio in an open and heterogeneous economy where firms combine public and private capital to produce their goods.”