{"status":"ok","message-type":"work","message-version":"1.0.0","message":{"indexed":{"date-parts":[[2026,10,10]],"date-time":"2026-10-10T02:27:52Z","timestamp":1791599272925,"version":"4.3.4"},"reference-count":47,"publisher":"The Econometric Society","issue":"2","license":[{"start":{"date-parts":[[2022,1,1]],"date-time":"2022-01-01T00:00:00Z","timestamp":1640995200000},"content-version":"unspecified","delay-in-days":0,"URL":"http:\/\/creativecommons.org\/licenses\/by-nc\/4.0\/"}],"content-domain":{"domain":[],"crossmark-restriction":false},"short-container-title":["QE"],"abstract":"<jats:p>We estimate a model in which fiscal and monetary policy obey the targeting rules of distinct policy authorities, with potentially different objective functions. We find: (1) Time\u2010consistent policy fits U.S. time series at least as well as instrument\u2010rules\u2010based behavior; (2) American policies often do not conform to the conventional mix of conservative monetary policy and debt\u2010stabilizing fiscal policy, although economic agents expect fiscal policy to stabilize debt eventually; (3) Even after the Volcker disinflation, policies did not achieve that conventional mix, as fiscal policy did not begin to stabilize debt until the mid 1990s; (4) The high inflation of the 1970s could have been effectively mitigated by either a switch to a fiscal targeting rule or an increase in monetary policy conservatism; (5) If fiscal behavior follows its historic norm to eventually stabilize debt, current high debt levels produce only modest inflation; if confidence in those norms erodes, high debt may deliver substantially more inflation.<\/jats:p>","DOI":"10.3982\/qe1678","type":"journal-article","created":{"date-parts":[[2022,5,2]],"date-time":"2022-05-02T13:01:03Z","timestamp":1651496463000},"page":"593-628","source":"Crossref","is-referenced-by-count":30,"title":["Strategic interactions in U.S. monetary and fiscal policies"],"prefix":"10.3982","volume":"13","author":[{"given":"Xiaoshan","family":"Chen","sequence":"first","affiliation":[{"name":"Durham University Business School, University of Durham"}],"role":[{"vocabulary":"crossref","role":"author"}]},{"given":"Eric M.","family":"Leeper","sequence":"additional","affiliation":[{"name":"Department of Economics, University of Virginia"},{"name":"NBER"}],"role":[{"vocabulary":"crossref","role":"author"}]},{"given":"Campbell","family":"Leith","sequence":"additional","affiliation":[{"name":"Adam Smith Business School, University of Glasgow"}],"role":[{"vocabulary":"crossref","role":"author"}]}],"member":"2359","published-online":{"date-parts":[[2022]]},"reference":[{"issue":"2","key":"quan200186-bib-0001","doi-asserted-by":"crossref","first-page":"305","DOI":"10.1016\/j.jmoneco.2003.05.002","volume":"51","author":"Amato","year":"2004","journal-title":"Journal of Monetary Economics"},{"issue":"2\u20134","key":"quan200186-bib-0002","doi-asserted-by":"crossref","first-page":"113","DOI":"10.1080\/07474930701220071","volume":"26","author":"An","year":"2007","journal-title":"Econometric Reviews"},{"key":"quan200186-bib-0003","doi-asserted-by":"crossref","first-page":"91","DOI":"10.1017\/CBO9780511492389.006","volume-title":"Fiscal Policies, Monetary Policies and Labour Markets. Key Aspects of European Macroeconomic Policymaking After Monetary Unification","author":"Beetsma","year":"2004"},{"issue":"3","key":"quan200186-bib-0004","doi-asserted-by":"crossref","first-page":"167","DOI":"10.1257\/aer.102.3.167","volume":"101","author":"Bianchi","year":"2012","journal-title":"American Economic Review Papers & Proceedings"},{"key":"quan200186-bib-0005","doi-asserted-by":"crossref","first-page":"113","DOI":"10.1016\/j.red.2017.02.011","volume":"26","author":"Bianchi","year":"2017","journal-title":"Review of Economic Dynamics"},{"issue":"2","key":"quan200186-bib-0006","doi-asserted-by":"crossref","first-page":"251","DOI":"10.1057\/s41308-018-0052-x","volume":"66","author":"Bornstein","year":"2018","journal-title":"IMF Economic Review"},{"issue":"3","key":"quan200186-bib-0007","doi-asserted-by":"crossref","first-page":"383","DOI":"10.1016\/0304-3932(83)90060-0","volume":"12","author":"Calvo","year":"1983","journal-title":"Journal of Monetary Economics"},{"key":"quan200186-bib-0008","doi-asserted-by":"crossref","first-page":"96","DOI":"10.1016\/j.jmoneco.2017.09.009","volume":"92","author":"Chen","year":"2017","journal-title":"Journal of Monetary Economics"},{"key":"quan200186-bib-0009","doi-asserted-by":"crossref","unstructured":"Chen, Xiaoshan, Eric M. Leeper, and Campbell Leith (2022), \u201cSupplement to \u2018Strategic interactions in U.S. monetary and fiscal policies\u2019.\u201d Quantitative Economics Supplemental Material, 13, https:\/\/doi.org\/10.3982\/QE1678.","DOI":"10.3982\/QE1678"},{"issue":"1","key":"quan200186-bib-0010","doi-asserted-by":"crossref","first-page":"1","DOI":"10.1086\/426038","volume":"113","author":"Christiano","year":"2005","journal-title":"Journal of Political Economy"},{"issue":"4","key":"quan200186-bib-0011","doi-asserted-by":"crossref","first-page":"837","DOI":"10.1016\/j.jmoneco.2003.09.003","volume":"51","author":"Davig","year":"2004","journal-title":"Journal of Monetary Economics"},{"key":"quan200186-bib-0012","first-page":"247","volume-title":"NBER Macroeconomics Annual 2006","volume":"21","author":"Davig","year":"2006"},{"issue":"2","key":"quan200186-bib-0013","doi-asserted-by":"crossref","first-page":"211","DOI":"10.1016\/j.euroecorev.2010.04.004","volume":"55","author":"Davig","year":"2011","journal-title":"European Economic Review"},{"issue":"4","key":"quan200186-bib-0014","doi-asserted-by":"crossref","first-page":"545","DOI":"10.1353\/mcb.2003.0028","volume":"35","author":"Favero","year":"2003","journal-title":"Journal of Money, Credit and Banking"},{"key":"quan200186-bib-0015","volume-title":"A Program for Monetary Stability","author":"Friedman","year":"1960"},{"issue":"2","key":"quan200186-bib-0016","doi-asserted-by":"crossref","first-page":"195","DOI":"10.1016\/S0304-3932(99)00023-9","volume":"44","author":"Gal\u00ed","year":"1999","journal-title":"Journal of Monetary Economics"},{"key":"quan200186-bib-0017","doi-asserted-by":"crossref","first-page":"1","DOI":"10.1080\/07474939908800428","volume":"18","author":"Geweke","year":"1999","journal-title":"Econometric Reviews"},{"issue":"1\u20132","key":"quan200186-bib-0018","doi-asserted-by":"crossref","first-page":"1","DOI":"10.1016\/0304-4076(94)90036-1","volume":"60","author":"Kim","year":"1994","journal-title":"Journal of Econometrics"},{"issue":"6","key":"quan200186-bib-0019","doi-asserted-by":"crossref","first-page":"1995","DOI":"10.3982\/ECTA8916","volume":"79","author":"Komunjer","year":"2011","journal-title":"Econometrica"},{"issue":"1","key":"quan200186-bib-0020","doi-asserted-by":"crossref","first-page":"129","DOI":"10.1016\/0304-3932(91)90007-B","volume":"27","author":"Leeper","year":"1991","journal-title":"Journal of Monetary Economics"},{"key":"quan200186-bib-0021","first-page":"2305","volume-title":"Handbook of Macroeconomics, vol. 2B","author":"Leeper","year":"2017"},{"key":"quan200186-bib-0022","doi-asserted-by":"crossref","first-page":"600","DOI":"10.1016\/j.jmoneco.2020.03.015","volume":"117","author":"Leeper","year":"2021","journal-title":"Journal of Monetary Economics"},{"issue":"8","key":"quan200186-bib-0023","doi-asserted-by":"crossref","first-page":"2409","DOI":"10.1257\/aer.20111196","volume":"107","author":"Leeper","year":"2017","journal-title":"American Economic Review"},{"issue":"8","key":"quan200186-bib-0024","doi-asserted-by":"crossref","first-page":"1673","DOI":"10.1016\/j.jmoneco.2003.01.002","volume":"50","author":"Leeper","year":"2003","journal-title":"Journal of Monetary Economics"},{"key":"quan200186-bib-0025","doi-asserted-by":"crossref","unstructured":"Leeper, Eric M. and Xuan Zhou (2021), \u201cInflation's role in optimal monetary-fiscal policy.\u201d Manuscript, University of Virginia.","DOI":"10.1016\/j.jmoneco.2021.10.006"},{"issue":"8","key":"quan200186-bib-0026","doi-asserted-by":"crossref","first-page":"2137","DOI":"10.1016\/j.euroecorev.2004.09.010","volume":"49","author":"Leith","year":"2005","journal-title":"European Economic Review"},{"issue":"3","key":"quan200186-bib-0027","doi-asserted-by":"crossref","first-page":"416","DOI":"10.1016\/j.red.2012.03.001","volume":"15","author":"Leith","year":"2012","journal-title":"Review of Economic Dynamics"},{"key":"quan200186-bib-0028","doi-asserted-by":"crossref","first-page":"313","DOI":"10.7551\/mitpress\/4907.003.0007","volume-title":"NBER Macroeconomics Annual 2005","volume":"20","author":"Lubik","year":"2006"},{"issue":"6","key":"quan200186-bib-0029","doi-asserted-by":"crossref","first-page":"1059","DOI":"10.1086\/261023","volume":"89","author":"MaCurdy","year":"1981","journal-title":"Journal of Political Economy"},{"issue":"9","key":"quan200186-bib-0030","doi-asserted-by":"crossref","first-page":"1595","DOI":"10.1016\/S0165-1889(02)00072-6","volume":"27","author":"Ozlale","year":"2003","journal-title":"Journal of Economic Dynamics and Control"},{"key":"quan200186-bib-0031","doi-asserted-by":"crossref","first-page":"195","DOI":"10.1111\/j.1467-937X.2006.00374.x","volume":"73","author":"Ravn","year":"2006","journal-title":"Review of Economic Studies"},{"issue":"4","key":"quan200186-bib-0032","doi-asserted-by":"crossref","first-page":"1169","DOI":"10.2307\/1885679","volume":"100","author":"Rogoff","year":"1985","journal-title":"The Quarterly Journal of Economics"},{"key":"quan200186-bib-0033","first-page":"11","volume-title":"Rethinking Stabilization Policy","author":"Romer","year":"2002"},{"issue":"2","key":"quan200186-bib-0034","doi-asserted-by":"crossref","first-page":"121","DOI":"10.1257\/000282802320189113","volume":"92","author":"Romer","year":"2002","journal-title":"American Economic Review"},{"key":"quan200186-bib-0035","doi-asserted-by":"crossref","unstructured":"Romer, Christina D. and David H. Romer (2009), A Narrative Analysis of Postwar Tax Changes. Online Appendix to Romer and Romer. (2010), https:\/\/eml.berkeley.edu\/~dromer\/papers\/nadraft609.pdf.","DOI":"10.1353\/eca.0.0046"},{"issue":"3","key":"quan200186-bib-0036","doi-asserted-by":"crossref","first-page":"763","DOI":"10.1257\/aer.100.3.763","volume":"100","author":"Romer","year":"2010","journal-title":"American Economic Review"},{"key":"quan200186-bib-0037","volume-title":"Volcker: The Triumph of Persistence","author":"Silber","year":"2012"},{"issue":"2","key":"quan200186-bib-0038","doi-asserted-by":"crossref","first-page":"113","DOI":"10.1016\/j.jeconom.2008.08.023","volume":"146","author":"Sims","year":"2008","journal-title":"Journal of Econometrics"},{"issue":"1","key":"quan200186-bib-0039","doi-asserted-by":"crossref","first-page":"54","DOI":"10.1257\/000282806776157678","volume":"96","author":"Sims","year":"2006","journal-title":"American Economic Review"},{"issue":"5","key":"quan200186-bib-0040","doi-asserted-by":"crossref","first-page":"1123","DOI":"10.1162\/154247603770383415","volume":"1","author":"Smets","year":"2003","journal-title":"Journal of the European Economic Association"},{"issue":"3","key":"quan200186-bib-0041","doi-asserted-by":"crossref","first-page":"586","DOI":"10.1257\/aer.97.3.586","volume":"97","author":"Smets","year":"2007","journal-title":"American Economic Review"},{"issue":"6","key":"quan200186-bib-0042","doi-asserted-by":"crossref","first-page":"2785","DOI":"10.3982\/ECTA8910","volume":"80","author":"Song","year":"2012","journal-title":"Econometrica"},{"issue":"2","key":"quan200186-bib-0043","doi-asserted-by":"crossref","first-page":"426","DOI":"10.1257\/.41.2.426","volume":"41","author":"Svensson","year":"2003","journal-title":"Journal of Economic Literature"},{"issue":"1","key":"quan200186-bib-0044","doi-asserted-by":"crossref","first-page":"140","DOI":"10.1016\/j.euroecorev.2010.11.009","volume":"55","author":"Traum","year":"2011","journal-title":"European Economic Review"},{"issue":"3","key":"quan200186-bib-0045","doi-asserted-by":"crossref","first-page":"669","DOI":"10.2307\/2673890","volume":"33","author":"Woodford","year":"2001","journal-title":"Journal of Money, Credit, and Banking"},{"key":"quan200186-bib-0046","volume-title":"Interest and Prices: Foundations of a Theory of Monetary Policy","author":"Woodford","year":"2003"},{"issue":"2","key":"quan200186-bib-0047","doi-asserted-by":"crossref","first-page":"345","DOI":"10.1016\/S0304-3932(96)90040-9","volume":"37","author":"Yun","year":"1996","journal-title":"Journal of Monetary Economics"}],"container-title":["Quantitative Economics"],"original-title":[],"language":"en","link":[{"URL":"https:\/\/onlinelibrary.wiley.com\/doi\/pdf\/10.3982\/QE1678","content-type":"unspecified","content-version":"vor","intended-application":"similarity-checking"}],"deposited":{"date-parts":[[2023,11,20]],"date-time":"2023-11-20T22:56:01Z","timestamp":1700520961000},"score":1,"resource":{"primary":{"URL":"http:\/\/qeconomics.org\/ojs\/index.php\/qe\/article\/view\/QE1678"}},"subtitle":[],"short-title":[],"issued":{"date-parts":[[2022]]},"references-count":47,"journal-issue":{"issue":"2","published-online":{"date-parts":[[2022]]}},"alternative-id":["10.3982\/QE1678"],"URL":"https:\/\/doi.org\/10.3982\/qe1678","relation":{},"ISSN":["1759-7323"],"issn-type":[{"value":"1759-7323","type":"print"}],"subject":[],"published":{"date-parts":[[2022]]}}}