Macro Musings with David Beckworth cover image

Peter Stella on the Fiscal Theory of the Price Level

Macro Musings with David Beckworth

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The Fiscal Theory of Open Market Operations

Fiscal policy a monetary policy are intricately linked in understanding this relationship so there is really no island of monetary policy that's truly independent of what fiscal policy is doing. The price level treats all these government liabilities as as equivalent or substitutes at some degree and then the final thing you mentioned then is it's expected future fiscal condition of the government that's going to be driving this process.

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