Crowding Out of Monetary Policy as a Limitation of Fiscal Policy

Martin Hiermeyer

MPRA Paper from University Library of Munich, Germany

Abstract: If expansionary fiscal policy is inflationary, expansionary fiscal policy forces an inflation-targeting central bank to be somewhat more restrictive in its monetary policy. This altered central bank policy comes at a cost in terms of output which has to be calculated against the output gain achieved by the expansionary fiscal policy.

Keywords: Fiscal; Policy (search for similar items in EconPapers)
JEL-codes: E62 E63 (search for similar items in EconPapers)
Date: 2016-09-02
New Economics Papers: this item is included in nep-mac and nep-mon
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Persistent link: https://EconPapers.repec.org/RePEc:pra:mprapa:73491

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