scholarly journals Fiscal policy is still an effective instrument of macroeconomic policy

2011 ◽  
Vol 58 (2) ◽  
pp. 143-156 ◽  
Author(s):  
Philip Arestis
Keyword(s):  
Monetary Policy ◽  
Fiscal Policy ◽  
Macroeconomic Policy ◽  
Policy Coordination ◽  
Careful Consideration ◽  
Recent Developments ◽  
Monetary Policy Coordination ◽  
Effective Instrument ◽  
Fiscal And Monetary Policy

Recent developments in macroeconomics and macroeconomic policy, what has come to be known as ?New Consensus in Macroeconomics?, downgrades the role of fiscal policy and upgrades that of monetary policy. This contribution aims to consider this particular contention by focusing on fiscal policy. We consider fiscal policy within the current ?new consensus? theoretical framework, which views fiscal policy as ineffective, and argue that it deserves a great deal more attention paid to it than it has been recently. We review and appraise recent and not so recent theoretical and empirical developments on the fiscal policy front. The possibility of fiscal and monetary policy coordination is proposed and discussed to conclude that it deserves a great deal more attention and careful consideration than it has been given to in the past. Our overall conclusion is that discretionary application of fiscal and monetary policy in a coordinated and focused manner as a tool of macroeconomic policy deserves serious attention paid to it than hitherto.

scholarly journals Monetary Policy Coordination and the Role of Central Banks

2014 ◽  
Vol 14 (70) ◽  
pp. 1 ◽  
Author(s):  
Rakesh Mohan ◽  
Muneesh Kapur ◽  
◽  
Keyword(s):  
Monetary Policy ◽  
Central Banks ◽  
Policy Coordination ◽  
Monetary Policy Coordination

scholarly journals Macroeconomic Policy Making and Current Account Imbalances in the Euro Area

2021 ◽  
Vol 54 (3) ◽  
pp. 347-373
Author(s):  
Taiki Murai ◽  
Gunther Schnabl
Keyword(s):  
Monetary Policy ◽  
Current Account ◽  
Euro Area ◽  
Debt Crisis ◽  
Bank Lending ◽  
Recent Developments ◽  
Current Account Imbalances ◽  
Fiscal And Monetary Policy ◽  
Account Imbalances

The paper analyses the role of fiscal and monetary policy for the development of the current account imbalances in the euro area, including the most recent developments during the coronavirus crisis. Several financial transmission channels such as international bank lending, changes in TARGET2 balances, international rescue credit and government bond purchases of euro area central banks are identified. It is found that differing fiscal policy stances which have interacted differently with the ECB’s monetary policy have been at roots of first diverging and then converging current account positions in the euro area. Since the European financial and debt crisis, public financing mechanisms and the unconventional monetary of the ECB have contributed to the persistence of intra-euro area current account imbalances.

scholarly journals Fiscal and monetary instruments of impact on economic development

2021 ◽  
pp. 215-224
Author(s):  
Mykola Pasichnyi
Keyword(s):  
Monetary Policy ◽  
Economic Development ◽  
Financial Regulation ◽  
Policy Coordination ◽  
Financial Policy ◽  
Synthesis Methods ◽  
Institutional Approach ◽  
Monetary Policy Coordination ◽  
Business Entities ◽  
Fiscal And Monetary Policy

The research subject includes the theoretical basis and mechanism of fiscal and monetary policy coordination. The study aims to justify the conceptual basis of fiscal- monetary policy interactions to ensure economic development. Methods. To achieve the appropriate tasks, we used a set of methods and approaches that helped ensure our investigation's conceptual unity. The systemic and structural approaches, analysis and synthesis methods, comparison, generalization, modeling, and scientific abstraction are applied. Results. In this paper, we improved the theoretical and methodological foundations of fiscal and monetary policy coordination. The author highlighted the necessity to use the institutional approach in that case. Also, we gave practical proposals to develop the system for assessing the effectiveness of the coordination of fiscal and monetary policy. Practical implications. Government economic policy and instruments of its implementation. Conclusions. Empirical experience has shown the advisability of fiscal and monetary policy coordination to ensure sustainable endogenous economic growth. Coordination of government financial policy measures in the context of the economic cycle stages should be based on an institutional approach. The interaction of fiscal and monetary policies should focus on increasing social welfare and the maintenance of long-term macroeconomic stability. The adaptive interaction of monetary and fiscal mechanisms and the improvement of the state's economic system's institutional architectonics contribute to the intensification of business entities' economic activity. Meanwhile, those factors positively influence on economy's competitiveness. The necessity of introducing a system for assessing the effectiveness of the coordination of fiscal and monetary policy determines effective measures of financial regulation at a certain stage of economic development.

scholarly journals Fiscal and monetary policy effectiveness in Turkey: A comparative analysis

2020 ◽  
pp. 19-19
Author(s):  
Philip Arestis ◽  
Hüseyin Şen ◽  
Ayşe Kaya
Keyword(s):  
Monetary Policy ◽  
Fiscal Policy ◽  
Output Growth ◽  
Distributed Lag ◽  
Autoregressive Distributed Lag ◽  
Fiscal Space ◽  
Monetary Policy Effectiveness ◽  
The Impact ◽  
Fiscal And Monetary Policy

Relying on the Autoregressive Distributed Lag cointegration technique, this paper assesses the comparative effectiveness of the fiscal and monetary policy on output growth in Turkey over the period 2003:q1-2019:q1. The empirical findings show that both policies are effective in promoting output growth but with varying degrees, suggesting that the impact of monetary policy on output growth is more significant than that of fiscal policy. Overall, based on the findings, we can suggest that the Turkish authorities should set sight on monetary policy to achieve higher output growth while seeking ways to improve the growth-enhancing role of fiscal policy. To that end, among many others, budgetary flexibility can be increased through creating fiscal space, and growth-friendly tax and spending reforms can be undertaken without undermining growth-equity trade-off while giving priority to proper coordination of fiscal policy with monetary policy.

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