title: Interaction between fiscal and monetary policy in a dynamic nonlinear model.
abstract: The objective of this study is to verify the dynamics between fiscal policy, measured by public debt, and monetary policy, measured by a reaction function of a central bank. Changes in monetary policies due to deviations from their targets always generate fiscal impacts. We examine two policy reaction functions: the first related to inflation targets and the second related to economic growth targets. We find that the condition for stable equilibrium is more restrictive in the first case than in the second. We then apply our simulation model to Brazil and United Kingdom and find that the equilibrium is unstable in the Brazilian case but stable in the UK case.
authors: Department of Economics, Sao Paulo State University (UNESP), Araraquara, SP, 14800-901, Brazil; Center for Polymer Studies and Department of Physics, Boston University, Boston, MA, 02215, United States of America.
authors: Mario A
authors: MA
authors: Bertella
authors: Center for Polymer Studies and Department of Physics, Boston University, Boston, MA, 02215, United States of America; Federal Institute of Education, Science and Technology, São Luis, MA, 65076-091, Brazil.
authors: Henio A
authors: HA
authors: Rego
authors: Campinas State University (UNICAMP), Campinas, SP, 13083-857, Brazil.
authors: Celso
authors: C
authors: Neris
authors: Department of Economics, Sao Paulo State University (UNESP), Araraquara, SP, 14800-901, Brazil; Center for Polymer Studies and Department of Physics, Boston University, Boston, MA, 02215, United States of America.
authors: Jonathas N
authors: JN
authors: Silva
authors: Zagreb School of Economics and Management, Zagreb, 10000, Croatia; Faculty of Civil Engineering, University of Rijeka, Rijeka, 51000, Croatia; Faculty of Economics, University of Ljubljana, Ljubljana, 10000, Slovenia.
authors: Boris
authors: B
authors: Podobnik
authors: Center for Polymer Studies and Department of Physics, Boston University, Boston, MA, 02215, United States of America.
authors: H Eugene
authors: HE
authors: Stanley
mesh_terms: D001938:Brazil; D003906:Developing Countries / Q000191:economics; D057217:Economic Development; D006801:Humans; D007250:Inflation, Economic; D017711:Nonlinear Dynamics; D011640:Public Policy; D006113:United Kingdom