Tracking Monetary-Fiscal Interactions across Time and Space
The result's identifiers
Result code in IS VaVaI
<a href="https://www.isvavai.cz/riv?ss=detail&h=RIV%2F49777513%3A23520%2F18%3A43953685" target="_blank" >RIV/49777513:23520/18:43953685 - isvavai.cz</a>
Alternative codes found
RIV/61989100:27510/18:10240258
Result on the web
<a href="https://www.ijcb.org/journal/ijcb18q2a4.htm" target="_blank" >https://www.ijcb.org/journal/ijcb18q2a4.htm</a>
DOI - Digital Object Identifier
—
Alternative languages
Result language
angličtina
Original language name
Tracking Monetary-Fiscal Interactions across Time and Space
Original language description
The long-term fiscal outlook of most high-income countries is grim. Should independent central bankers be afraid of an unpleasant monetarist arithmetic, i.e., fiscal imbalances spilling over to monetary policy and jeopardizing price stability? To provide some insights, this paper tracks the interactions between fiscal and monetary policies in the data since 1980 for Australia, Canada, Japan, Switzerland, the United Kingdom, and the United States. In doing so it uses a combination of time-varying parameter vector autoregression with sign, magnitude, and contemporaneous restrictions identification. Unlike conventional approaches, this can capture changes in monetary and fiscal behavior that are gradual and differ across the two policies. Our results show that in the United States the degree of monetary policy accommodation of fiscal shocks (debt-financed government spending) increased gradually between the late 1980s and the 2008 crisis, i.e., over the whole tenure of Chairman Greenspan. In contrast, it seems to have decreased over this period in the United Kingdom, Australia, Switzerland, and Canada. Our benchmark analysis and several robustness checks show that legislating numerical inflation targets may account for some of the country differences, presumably because they may shift the strategic power from fiscal to monetary policy. We conclude by considering the implications of our results for the long-term likelihood of an unpleasant monetarist arithmetic in the six countries.
Czech name
—
Czech description
—
Classification
Type
J<sub>imp</sub> - Article in a specialist periodical, which is included in the Web of Science database
CEP classification
—
OECD FORD branch
50202 - Applied Economics, Econometrics
Result continuities
Project
<a href="/en/project/GA15-00735S" target="_blank" >GA15-00735S: Stability analysis of optima and equilibria in economics</a><br>
Continuities
P - Projekt vyzkumu a vyvoje financovany z verejnych zdroju (s odkazem do CEP)
Others
Publication year
2018
Confidentiality
S - Úplné a pravdivé údaje o projektu nepodléhají ochraně podle zvláštních právních předpisů
Data specific for result type
Name of the periodical
International Journal of Central Banking
ISSN
1815-4654
e-ISSN
—
Volume of the periodical
14
Issue of the periodical within the volume
3
Country of publishing house
DE - GERMANY
Number of pages
61
Pages from-to
167-227
UT code for WoS article
000435498400007
EID of the result in the Scopus database
2-s2.0-85059631860