Macroeconomic Stabilization, Monetary-Fiscal Interactions, and Europe's Monetary Union
27 Pages Posted: 16 Oct 2017
There are 2 versions of this paper
Macroeconomic Stabilization, Monetary-Fiscal Interactions, and Europe's Monetary Union
Date Written: October 2017
Abstract
The euro area recently experienced a prolonged period of weak economic activity and very low inflation. This paper reviews models of business cycle stabilization with an eye to formulating lessons for policy in the euro area. According to standard models, after a large recessionary shock accommodative monetary and fiscal policy together may be necessary to stabilize economic activity and inflation. The paper describes practical ways for the euro area to be able to implement an effective monetary-fiscal policy mix.
Keywords: eurobond, Government bonds, Joint Analysis of Fiscal and Monetary Policy, Lower Bound on Nominal Interest Rates, Self-Fulfilling Sovereign Default
JEL Classification: E31, E62, E63
Suggested Citation: Suggested Citation
Marek Jarocinski
European Central Bank (ECB) ( email )
Sonnemannstrasse 22
Frankfurt am Main, 60314
Germany
+49 69 1344 6414 (Phone)
Register to save articles to
your library
Macroeconomic Stabilization, Monetary-Fiscal Interactions, and Europe's Monetary Union
This is a CEPR Discussion Paper. CEPR charges a fee of $8.00 for this paper.
If you wish to purchase the right to make copies of this paper for distribution to others, please select the quantity.
