Essays on Monetary and Fiscal Policy Interactions
This dissertation consists of three self-contained chapters on monetary policy and fiscal policy. All three papers concern the effects of monetary and fiscal policy in the presence of financial frictions. In the first paper this friction is a zero lower bound on the nominal interest rate, which can leave monetary policymaker unable to stimulate the economy through the traditional interest rate channel. In the two last papers, the friction is limited asset market participation of households, in the sense that a fraction of households have no access to asset markets and thus consume their disposable income every period.