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Shared Problem, Shared Solution: Benefits from Fiscal-Monetary Interactions in the Euro Area
Robert C. M. Beyer
Rupa Duttagupta
Alexandra Fotiou
Ms. Keiko Honjo
Mark Horton
Mr. Mark A Horton
Zoltan Jakab
Vina Nguyen
Mr. Rafael A Portillo
Rafael Portillo
Jesper Lindé
Mrs. Nujin Suphaphiphat
Mr. Li Zeng
出版
International Monetary Fund
, 2023-07-21
主題
Business & Economics / Inflation
Business & Economics / Economics / Macroeconomics
Business & Economics / Public Finance
Business & Economics / Economics / General
ISBN
9798400249051
URL
http://books.google.com.hk/books?id=uE3NEAAAQBAJ&hl=&source=gbs_api
EBook
SAMPLE
註釋
This paper employs two established macroeconomic models to show that fiscal policy in the euro area can help monetary policy in reducing inflation. Specifically, a fiscal consolidation of 1 percent of GDP for two years and 0.5 percent in the third year across the euro area would ease the policy interest rate by 30-50 basis points relative to the baseline scenario, while lowering inflation. It would also put the public debt-to-GDP ratio on a downward path, with the output costs reversing after the second year. Additionally, a stronger fiscal contribution to the policy mix could mitigate financial fragmentation risks. In the current context of elevated inflation in all euro area economies, the findings suggest two key takeaways: first, synchronized fiscal and monetary policies offer gains even when monetary policy is unconstrained and, second, sharing the burden of lowering inflation through fiscal consolidation among euro area members is beneficial for union-wide inflation reduction, improving debt sustainability and inducing a lower policy rate path.