Macroeconomic stabilization, monetary-fiscal interactions, and Europe's monetary union
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Peer-reviewed
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Abstract
© 2018 Elsevier B.V. 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.
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Keywords
38 Economics, 3802 Econometrics, 3803 Economic Theory
Journal Title
European Journal of Political Economy
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Journal ISSN
0176-2680
Volume Title
57
Publisher
Elsevier BV