Approaches to Determining the Interaction Modes of Budgetary-Tax and Monetary Policy

E. Yu. Ablaev ()
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E. Yu. Ablaev: Center for Macroeconomic Analysis and Short-Term Forecasting, Institute of Economic Forecasting, Russian Academy of Sciences

Studies on Russian Economic Development, 2025, vol. 36, issue 3, 406-415

Abstract: Abstract The article is devoted to the problem of interaction between budgetary and tax and monetary policies. In economic literature, it is customary to distinguish between passive and active regimes of fiscal and monetary policy. In turn, the combination of one or another mode of policies being implemented determines the forms of their interaction. In this case, the condition for achieving price stability is the presence of coordination – one of the policies is in active mode, and the other in passive mode. Such coordination is possible in a situation of fiscal or monetary dominance. Through empirical analysis, it was concluded that there is no stable coordination between monetary and fiscal policies in Russia, which may explain the high level of inflation. However, the current plans and forecasts of the Government and the Bank of Russia suggest a return to the regime of monetary dominance. Compliance with the budget rule is defined as a necessary condition for the implementation of coordinated economic policy.

Keywords: fiscal policy; monetary policy; coordinated economic policy; budget rules; monetary rules; public debt; inflation targeting (search for similar items in EconPapers)
Date: 2025
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DOI: 10.1134/S1075700725700133

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