Paper Money
American Economic Review
vol. 103,
no. 2, April 2013
(pp. 563-84)
Abstract
Drastic changes in central bank operations and monetary institutions in recent years have made previously standard approaches to explaining the determination of the price level obsolete. Recent expansions of central bank balance sheets and of the levels of rich-country sovereign debt, as well as the evolving political economy of the European Monetary Union, have made it clear that fiscal policy and monetary policy are intertwined. Our thinking and teaching about inflation, monetary policy, and fiscal policy should be based on models that recognize fiscal-monetary policy interactions. (JEL E31, E52, E58, E62, H63)Citation
Sims, Christopher A. 2013. "Paper Money." American Economic Review, 103 (2): 563-84. DOI: 10.1257/aer.103.2.563Additional Materials
JEL Classification
- E31 Price Level; Inflation; Deflation
- E52 Monetary Policy
- E58 Central Banks and Their Policies
- E62 Fiscal Policy
- H63 National Debt; Debt Management; Sovereign Debt