A Systematic Review of the Association between Fiscal Policy and Monetary Policy: Interactions, Challenges, and Implications

Samuel Yeboah

MPRA Paper from University Library of Munich, Germany

Abstract: This systematic review examines the association between fiscal policy and monetary policy, focusing on their interactions, channels of influence, policy coordination challenges, and the macroeconomic effects of their interactions. The review highlights the importance of time lags, policy mix, policy independence, international interactions, and political economy considerations in shaping the association between fiscal and monetary policies. It also explores the implications of fiscal and monetary policy interactions for financial stability, sectoral effects, public debt management, and the transmission of monetary policy. Furthermore, the review emphasizes the role of institutional frameworks and rules-based policy frameworks in enhancing the effectiveness and credibility of fiscal and monetary policies. Overall, a comprehensive understanding of the association between fiscal and monetary policies is crucial for policymakers to design coordinated and effective policy frameworks that promote macroeconomic stability and sustainable growth.

Keywords: fiscal policy; monetary policy; policy coordination; time lags; policy mix; policy independence; international interactions; financial stability; sectoral effects; public debt management; the transmission of monetary policy; institutional frameworks (search for similar items in EconPapers)
JEL-codes: E52 E61 E62 E63 H50 H62 H63 (search for similar items in EconPapers)
Date: 2022-10-10, Revised 2022-12-15
New Economics Papers: this item is included in nep-cba, nep-mfd and nep-mon
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Persistent link: https://EconPapers.repec.org/RePEc:pra:mprapa:117530

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