{
  "title": "Financial Stability and Fiscal Crises in a Monetary Union",
  "publication": "IMF Working Papers, December 1, 2001",
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  "summary": "The main tasks of central banks are to secure price and financial stability. These objectives can, in times of crises, conflict with one another, and the central bank may have to renounce one of them in order to secure the other.",
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    {
      "heading": "Summary and central findings",
      "content": "- The main tasks of central banks are to secure price and financial stability.\n- In crises, these objectives can conflict, and the central bank may have to renounce one of them in order to secure the other.\n- In a monetary union, this trade-off can be exacerbated by the presence of highly indebted countries or by the risk of loose fiscal policies.\n- The paper offers a simple theoretical model that captures the trade-off between price stability and financial stability.\n- Different fiscal institutions are compared to evaluate their impact on the conduct of monetary policy.\n- The fiscal criteria of the Maastricht Treaty and the Pact for Stability and Growth in Europe are analyzed in light of this model.\n- Fiscal mechanisms exist to help prevent or minimize the risk of fiscal crises and the corresponding risk of central bank financing and inflation."
    },
    {
      "heading": "Policy implications and institutional analysis",
      "content": "- Fiscal criteria and mechanisms can influence the central bank’s trade-off between price and financial stability in a monetary union.\n- Comparing fiscal institutions sheds light on how rules like those in the Maastricht Treaty and the Pact for Stability and Growth affect monetary policy choices during crises.\n- Effective fiscal mechanisms can reduce the likelihood of central bank financing of fiscal deficits and the associated inflationary risk."
    },
    {
      "heading": "Subject classification and keywords",
      "content": "- Subject: Banking, Fiscal policy, Inflation, Monetary unions, Price stabilization\n- Keywords: central bank, WP\n\n---\n\n Content in this bundle\n\n- 128323\n  - 128323 (Markdown version){rel=\"alternate\" type=\"text/markdown\"}\n  - 128323 (PDF){rel=\"external\" type=\"application/pdf\"}\n\n---\n\nSource: https://www.imf.org/en/publications/wp/issues/2016/12/30/financial-stability-and-fiscal-crises-in-a-monetary-union-15516"
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    "Authors: Samir Jahjah",
    "Published: December 1, 2001",
    "Series: IMF Working Papers",
    "DOI: https://doi.org/10.5089/9781451874358.001",
    "The main tasks of central banks are to secure price and financial stability.",
    "In crises, these objectives can conflict, and the central bank may have to renounce one of them in order to secure the other.",
    "In a monetary union, this trade-off can be exacerbated by the presence of highly indebted countries or by the risk of loose fiscal policies.",
    "The paper offers a simple theoretical model that captures the trade-off between price stability and financial stability.",
    "Different fiscal institutions are compared to evaluate their impact on the conduct of monetary policy.",
    "The fiscal criteria of the Maastricht Treaty and the Pact for Stability and Growth in Europe are analyzed in light of this model.",
    "Fiscal mechanisms exist to help prevent or minimize the risk of fiscal crises and the corresponding risk of central bank financing and inflation.",
    "Fiscal criteria and mechanisms can influence the central bank’s trade-off between price and financial stability in a monetary union.",
    "Comparing fiscal institutions sheds light on how rules like those in the Maastricht Treaty and the Pact for Stability and Growth affect monetary policy choices during crises.",
    "Effective fiscal mechanisms can reduce the likelihood of central bank financing of fiscal deficits and the associated inflationary risk.",
    "Subject: Banking, Fiscal policy, Inflation, Monetary unions, Price stabilization",
    "Keywords: central bank, WP",
    "**128323**"
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