TY  - JOUR
AU  - McCallum,Bennett T.
TI  - Indeterminacy, Bubbles, and the Fiscal Theory of Price Level Determination
JF  - National Bureau of Economic Research Working Paper Series
VL  - No. 6456
PY  - 1998
Y2  - March 1998
UR  - http://www.nber.org/papers/w6456
L1  - http://www.nber.org/papers/w6456.pdf
N1  - Author contact info:
Bennett T. McCallum
Tepper School of Business, Posner 256
Carnegie Mellon University
Pittsburgh, PA 15213
Tel: 412/268-2347
Fax: 412/268-6830
E-Mail: bm05@andrew.cmu.edu
AB  - The recently-developed fiscal theory of price level determination contends that there is an important class of policy rules in which there exists a unique rational expectations solution that shows the price level to be dependent upon fiscal policy and independent of monetary variables.  The present paper argues, however, that there is an alternative solution to these models that has entirely traditional (or  monetarist') properties.  This latter solution is perhaps the more plausible since it is the solution that is typically regarded as the bubble-free  fundamentals' solution.  The argument involves a respecification of feasible instrument variables.
ER  -