Citation

Discussion Paper Details

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Title: Macroeconomic Stabilization, Monetary-Fiscal Interactions, and Europe's Monetary Union

Author(s): Giancarlo Corsetti, Luca Dedola, Marek Jarocinski, Bartosz Adam Mackowiak and Sebastian Schmidt

Publication Date: October 2017

Keyword(s): eurobond, Government bonds, Joint Analysis of Fiscal and Monetary Policy, Lower Bound on Nominal Interest Rates and Self-Fulfilling Sovereign Default

Programme Area(s): International Macroeconomics and Finance and Monetary Economics and Fluctuations

Abstract: The euro area recently experienced a prolonged period of weak economic activity and very low inflation. This paper reviews models of business cycle stabilization with an eye to formulating lessons for policy in the euro area. According to standard models, after a large recessionary shock accommodative monetary and fiscal policy together may be necessary to stabilize economic activity and inflation. The paper describes practical ways for the euro area to be able to implement an effective monetary-fiscal policy mix.

For full details and related downloads, please visit: https://cepr.org/active/publications/discussion_papers/dp.php?dpno=12371

Bibliographic Reference

Corsetti, G, Dedola, L, Jarocinski, M, Mackowiak, B and Schmidt, S. 2017. 'Macroeconomic Stabilization, Monetary-Fiscal Interactions, and Europe's Monetary Union'. London, Centre for Economic Policy Research. https://cepr.org/active/publications/discussion_papers/dp.php?dpno=12371