The monetary-fiscal policy nexus in the wake of the pandemic

Michael Chui, Tirupam Goel, Aaron Mehrotra and Kostas Tsatsaronis ()

No 122 in BIS Papers from Bank for International Settlements

Abstract: The Covid-19 pandemic cast the interaction between fiscal and monetary policy in a new light. The pandemic-induced recession made greater demands on both fiscal and monetary policy, triggered the need for closer domestic policy co-ordination, and led to a greater use of central bank balance sheets. This note discusses these issues, drawing on evidence from a survey of emerging market economy (EME) central banks. It first reviews the interaction between monetary and fiscal policy during the first phase of the Covid-19. It then explores the main factors that enabled EMEs to respond in a strongly countercyclical way to the pandemic shock. Finally, it discusses mediumterm policy challenges given that high private and public sector debt levels will need to gradually decline and buffers will have to be built up as the economy returns to normality.

Date: 2022 Written 2022-03
ISBN: 978-92-9259-531-9
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (2)

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Chapters in this book:

The monetary-fiscal policy nexus in the wake of the pandemic , pp 1-25

Kostas Tsatsaronis, Michael Chui, Tirupam Goel and Aaron Mehrotra

The Covid-19 crisis response, monetary and fiscal policy interactions: the case of Argentina , pp 27-38

Central Bank of Argentina

Brazil: Covid-19 and the road to recovery , pp 39-55

Central Bank of Brazil

The Central Bank of Chile´s policy response to the Covid-19 crisis , pp 57-72

Central Bank of Chile

A preliminary analysis of coordination between monetary and fiscal policies during Covid-19 , pp 73-77

People’s Bank of China

The Covid-19 shock and the monetary policy response in Colombia , pp 79-114

Hernando Vargas-Herrera, Juan Ospina-Tejeiro and José Romero

Monetary and fiscal policy interactions in the wake of the pandemic: the case of the Czech Republic , pp 115-128

Czech National Bank

Riding out the Covid-19 challenge under a currency board arrangement: Hong Kong SAR’s experience , pp 129-136

Hong Kong Monetary Authority

The Magyar Nemzeti Bank’s government debt securities purchase programme , pp 137-148

Magyar Nemzeti Bank

Monetary and fiscal policy interactions in the wake of the pandemic , pp 149-157

Reserve Bank of India

Monetary and fiscal policy interactions in the wake of the pandemic , pp 159-165

Bank Indonesia

Domestic asset purchases by the Bank of Israel during the pandemic , pp 167-176

Bank of Israel

Monetary and fiscal policy interactions in the wake of the pandemic in Korea , pp 177-186

Bank of Korea

Monetary and fiscal policy interactions in the wake of the pandemic , pp 187-194

Central Bank of Malaysia

Monetary and fiscal policy interactions in the wake of the pandemic , pp 195-203

Bank of Mexico

Response to the Covid-19 Pandemic , pp 205-216

Central Reserve Bank of Peru

Dynamics of monetary policy and fiscal policy during the pandemic: the Philippine experience , pp 217-240

Bangko Sentral ng Pilipinas

Macroeconomic policy response to the Covid-19 shock , pp 241-250

National Bank of Poland

Monetary and fiscal policy interactions in the wake of the pandemic: Russia’s experience , pp 251-262

Bank of Russia

Monetary and fiscal policy interactions in the wake of the pandemic , pp 263-266

Saudi Central Bank

Background note on macroeconomic policy responses to Covid-19: the Singapore experience , pp 267-279

Monetary Authority of Singapore

Monetary and fiscal policy interactions in the wake of the Covid-19 pandemic , pp 281-289

South African Reserve Bank (sarb)

Monetary and fiscal policy interactions in the wake of the pandemic , pp 291-297

Bank of Thailand

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Chapter: The monetary-fiscal policy nexus in the wake of the pandemic (2022)
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