The Fiscal Effects of Monetary Policy
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Summary:
This paper develops a simple framework to examine the budgetary implications of monetary policy measures. It further outlines, using this framework, the various channels of influence that tight monetary policy may have on the budget deficit. The cumulative effect might be quantitatively large although each effect might be small. Most of the effects tend to increase the budget deficit as result of tight monetary policy, but tight monetary policy causes a short-run decrease in the government debt. Thus, macroeconomic policy coordination should be considered.
Series:
Working Paper No. 1998/066
Subject:
Budget planning and preparation Government debt management Monetary aggregates Monetary tightening Public debt
Frequency:
semi- annual
English
Publication Date:
May 1, 1998
ISBN/ISSN:
9781451962185/1018-5941
Stock No:
WPIEA0661998
Pages:
19
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