1. Politica monetaria convenzionale: abbassare i tassi a breve.
2. Politica monetaria non convenzionale: abbassare i tassi a lungo (penali sulla liquidità).
3. Politica fiscale convenzionale di primo grado: stimolare cio’ che stimolerebbe la politica monetaria (investimenti).
4. Politica fiscale convenzionale di secondo grado: abbassare tasse.
5. Politica fiscale convenzionale di terzo grado: aumentare la spesa pubblica.
The first level of the hierarchy applies when the zero lower bound on the
short-term interest rate is not binding. In this case, conventional monetary
policy is sufficient to restore the economy to full employment. That is, all
that is needed is for the central bank to cut the short-term interest rate. Fiscal
policy should be set based on classical principles of cost-benefit analysis, rather than Keynesian principles of demand management. Government
consumption should be set to equate its marginal utility with the marginal
utility of private consumption. Government investment should be set to equate
its marginal product with the marginal product of private investment
The second level of the hierarchy applies when the short-term interest
rate hits against the zero lower bound. In this case, unconventional monetary policy becomes the next policy instrument to be used to restore full
employment. A reduction in long-term interest rates may be sufficient when
a cut in the short-term interest rate is not. And an increase in the long-term
nominal anchor is, in this model, always sufficient to put the economy back
on track. This policy might be interpreted, for example, as the central bank
targeting a higher level of nominal GDP growth. With this monetary policy
in place, fiscal policy remains classically determined.
The third level of the hierarchy is reached when monetary policy is
severely constrained. In particular, the short-term interest rate has hit the
zero bound, and the central bank is unable to commit to future monetary
policy actions. In this case, fiscal policy may play a role. The model, however, does not point toward conventional fiscal policy, such as cuts in taxes
and increases in government spending, to prop up aggregate demand. Rather,
fiscal policy should aim at incentivizing interest-sensitive components of
spending, such as investment. In essence, optimal fiscal policy tries to do
what monetary policy would if it could
The fourth and final level of the hierarchy is reached when monetary
policy is severely constrained and fiscal policymakers can rely on only a n. gregory mankiw and matthew weinzierl 247
limited set of fiscal tools. If targeted tax policy is for some reason unavailable, then policymakers may want to expand aggregate demand by increasing government spending, as well as cutting the overall level of taxation to
encourage consumption. In a sense, conventional fiscal policy is the demand
management tool of last resort.
