Please use this identifier to cite or link to this item: http://hdl.handle.net/10419/212117
Authors: 
Spargoli, Fabrizio
Zagaglia, Paolo
Year of Publication: 
2008
Series/Report no.: 
Bank of Finland Research Discussion Papers 26/2008
Abstract: 
We study the term structure implications of the fiscal theory of price level determination. We introduce the intertemporal budget constraint of the government in a general equilibrium model in continuous time. Fiscal policy is set according to a simple rule whereby taxes react proportionally to real debt. We show how to solve for the prices of real and nominal zero coupon bonds.
Subjects: 
bond pricing
fiscal policy
mathematical methods
JEL: 
G12
Persistent Identifier of the first edition: 
ISBN: 
978-952-462-469-5
Document Type: 
Working Paper

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