☆ 4.7 Article

Debt stabilisation and dynamic interaction between monetary and fiscal policy: In medio stat virtus

COMMUNICATIONS IN NONLINEAR SCIENCE AND NUMERICAL SIMULATION (2023)

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Policy conflict, coordination, and leadership in a monetary union under imperfect instrument substitutability

Georgios Chortareas et al.

Summary: This paper investigates the implications of strategic fiscal-monetary policy interactions on the policy mix and coordination in a monetary union under imperfect policy instrument substitutability. The study shows that relative policy effectiveness and the cost channel together define policy-mix outcomes, policies' cyclicality, and coordination problems. In leadership strategic regimes, the lead authority reacts to the follower authority's reaction parameter based on the effectiveness of their policy instruments in stabilizing inflation.

JOURNAL OF ECONOMIC BEHAVIOR & ORGANIZATION (2021)

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Article Economics