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Interactions between monetary and fiscal policies
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Orientador(es)
Resumo(s)
Using a panel data set of the 28 EU countries from 1970 to 2015, we
study the nature of monetary and fiscal policies of both respective
authorities and assess how economic and institutional events influence
each authority’s reaction functions. Our results show that, for
the all period under analysis and controlling for institutional variables,
inflation has a significant impact on monetary policy, and that
governments raise their primary balances when facing increases in
government debt. We also find a substitution relationship between
both policies, whereby the central bank assumes an active role,
especially in cases of higher levels of debt. Furthermore, the introduction
of a common currency shared by 19 out of 28 EU countries
had a structural impact on the response and the interaction between
the two policies.
Descrição
Palavras-chave
Monetary Policy Fiscal Policy Reaction Functions
Contexto Educativo
Citação
Afonso, António; José Alves, and Raquel Balhote.(2019) "Interactions between monetary and fiscal policies". Journal of Applied Economics, Vol. 22, No.1: pp.132-151.
Editora
Taylor & Francis Group