Monetary-fiscal policy interactions in the euro area
Xavier Debrun,
Klaus Masuch,
Guiseppe Ferrero,
Isabel Vansteenkiste,
Marien Ferdinandusse,
Leopold von Thadden,
Sebastian Hauptmeier,
Mario Alloza,
Chloé Derouen,
Krzysztof Bańkowski,
João Domingues Semeano,
Jean Barthélemy,
Jens Eisenschmidt,
Tilman Bletzinger,
Thomas Faria,
Dennis Bonam,
Maximilian Freier,
Othman Bouabdallah,
Gabriele Galati,
Pablo Burriel (),
José Garcia,
Maria Campos,
Sandor Gardo,
José Cardoso da Costa,
Rafael Gerke,
Cristina Checherita-Westphal,
Felix Hammermann,
Bernadette Chmelar,
Stephan Haroutunian,
Jacopo Cimadomo,
Benjamin Hartung,
Kai Christoffel,
Pascal Jacquinot,
Christophe Kamps (),
Steven Poelhekke,
Iván Kataryniuk,
Sebastiaan Pool,
Julia Körding,
Doris Prammer,
Thomas Kostka,
Marzia Romanelli,
Bartosz Maćkowiak,
Joost Röttger,
Falk Mazelis,
Stephan Sauer,
Marco Marrazzo,
Katja Schmidt,
Carlos Montes-Galdón,
Sebastian Schmidt,
Philip Muggenthaler,
Fabian Schupp,
Carolin Nerlich,
Ralph Setzer,
Galo Nuño,
Kamila Sławińska,
Talga Ozden,
Agnieszka Trzcinska,
Alari Paulus,
Vilém Valenta,
Alexandru Penciu,
Andreea Liliana Vladu,
Anamaria Piloiu,
Guido Wolswijk and
Massimiliano Pisani
Authors registered in the RePEc Author Service: Cristina Checherita Westphal
No 273, Occasional Paper Series from European Central Bank
Abstract:
The last review of the ECB’s monetary policy strategy in 2003 followed a period of predominantly upside risks to price stability. Experience following the 2008 financial crisis has focused renewed attention on the question of how monetary and fiscal policy should best interact, in particular in an environment of structurally low interest rates and persistent downside risks to price stability. This debate has been further intensified by the economic impact of the coronavirus (COVID-19) pandemic. In the euro area, the unique architecture of a monetary union consisting of sovereign Member States, with cross-country heterogeneities and weaknesses in its overall construction, poses important challenges. Against this background, this report revisits monetary-fiscal policy interactions in the euro area from a monetary policy perspective and with a focus on the ramifications for price stability and maintaining central bank independence and credibility. The report consists of three parts. The first chapter presents a conceptual framework for thinking about monetary-fiscal policy interactions, thereby setting the stage for a discussion of specifically euro area aspects and challenges in subsequent parts of the report. In particular, it reviews the main ingredients of the pre-global financial crisis consensus on monetary-fiscal policy interactions and addresses significant new insights and refinements which have gained prominence since 2003. In doing so, the chapter distinguishes between general conceptual aspects – i.e. those aspects that pertain to an environment characterised by a single central bank and a single fiscal authority and those aspects that pertain to an environment characterised by a single central bank and many fiscal authorities (a multi-country monetary union). ... JEL Classification: E52, E58, E62, E63, F45
Keywords: Fiscal Policy; Monetary Policy; Monetary Union (search for similar items in EconPapers)
Date: 2021-09
New Economics Papers: this item is included in nep-cba, nep-eec, nep-isf, nep-mac and nep-mon
Note: 369508
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (6)
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Persistent link: https://EconPapers.repec.org/RePEc:ecb:ecbops:2021273
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