Pure Theories of Policy Mix : Nordhaus's Destructive Game and the Case of High Inflation
Bibliographic record
Abstract
Nordhaus’s theory of the “destructive game” (1994) is a central analysis of the policy mix. His theory showed that a lack of cooperation between the central bank and the fiscal authorities would result in the budget deficit being higher and the inflation rate lower than either of the authorities would want. It explains indeed why Central Bank independence can lead to these suboptimal results even when the goals of monetary policy are set by the fiscal authority. But the construction of this model was based on the existence of a Phillips-type relationship between the inflation rate and the unemployment rate, which has lost its relevance in the contemporary economy. Today, the prospect of a rise in the inflation rate leads to an increase in interest rates and a subsequent rise in the unemployment rate. This paper intends to show that the main conclusions of the Nordhaus model are preserved, with a model based on an increasing relationship between the inflation rate and the unemployment rate. Moreover, as in traditional macroeconomic theory, according to this version of the model, the unemployment rate is the same in steady states for different strategic equilibria.
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How this classification was reachedexpand
Full frame distilled prediction
Teacher imitationNot calibrated prevalence, not ground truth. Human validation pending. Learned from the 10,348 direct Codex labels and 10,348 direct Gemma labels. Candidate is the union of thresholded teacher heads; consensus is their intersection. These outputs are machine_predicted_unvalidated and are not human labels or direct frontier model labels.
Codex and Gemma teacher scores by category
| Category | Codex | Gemma |
|---|---|---|
| Metaresearch | 0.001 | 0.000 |
| Meta-epidemiology (narrow) | 0.000 | 0.000 |
| Meta-epidemiology (broad) | 0.001 | 0.001 |
| Bibliometrics | 0.001 | 0.000 |
| Science and technology studies | 0.000 | 0.000 |
| Scholarly communication | 0.000 | 0.000 |
| Open science | 0.000 | 0.000 |
| Research integrity | 0.000 | 0.000 |
| Insufficient payload (model declined to judge) | 0.001 | 0.000 |
Machine scores (provisional)
The two teacher heads of the student model, read on this work. A score orders the frame for review; it never asserts a category, and the validation status ships verbatim with every row.
Baseline scores from an immature model (maturity gate not passed, 7 training rounds). Scores rank; they never assert a category.
score_only:v0-immature-baseline · verbatim from the scoring run: score_only means the number may rank works, and no category label ships from itClassification
machine, unvalidatedMachine predicted; a candidate call from one teacher head, not a consensus.
How this classification was reached, model by model and score by score, is at the end of the page under "How this classification was reached".