Comment

摘要

This is an important and thought-provoking paper. Its basic idea, that long-run fiscal considerations are central to understanding price and, in a sticky-price world, output fluctuations, is surely correct. In fact it is the ability of fiscal policy to create a temporary imbalance between the value of government liabilities at current prices and their backing by future tax commitments that is the fundamental source of any impact of fiscal policy on demand. We see in political rhetoric and popular discussion that the extent to which current tax and spending policies are thought appropriately to respond to the amount of outstanding debt or deficits changes over time, and we need to account for this in our thinking about monetary and fiscal policy. The paper estimates a model of time-varying fiscal and monetary policy and embeds it in a calibrated equilibrium model to demonstrate that the estimated effects are important.