Scholarly record
THE FISCAL THEORY OF THE PRICE LEVEL IN THE CONTEXT OF THE POLICY MIX
Abstract
The economic authorities decisions not only influence the economy, but also induce interactions between economic authorities. The recent crisis has provided evidence that the fiscal policy significantly shapes the decisions of independent central banks responsible for ensuring price stability the main objective of monetary policy. This mechanism, described by the fiscal theory of the price level, is not a new discovery, because it has been debated on since the 1990s. The fiscal theory of the price level holds that because a monetary policy alone cannot ensure the stability of prices it should be assisted by an appropriate fiscal policy. The economists interest in monetary and fiscal interactions has been additionally stimulated by the rising levels of public debt, particularly after the recent economic crisis, large fiscal packages, and large purchases of bonds by central banks. This article analyses the importance of the fiscal theory of the price level in the context of monetary and fiscal interactions. The research methods used to this end include a review of the scientific literature, the statistical processing of the data and statistical research methods. The research findings lead to a conclusion about the fiscal policys increasing role in policy mix. The analysis is original in that it emphasizes the importance of a proper fiscal policy and reveals its growing significance for economic processes.
Publication Impact Profile
- Captures
- Mendeley - Readers: 1
Publication details
ReferencesPending
Structured references will appear here after the reference import pass. The count is preserved now so the scholarly record is not incomplete.
View or Download full articleAccess options
SWS access login
Login as SWS Scientific CommitteeLogin as SWS Scientific PartnerLogin as SWS AuthorAuthors and approved SWS contributors will read and export their own linked papers after identity matching by SWS profile, email and SGEM GlobalID.
For librarian assistance: [email protected]
Purchase Instant Access
- Article can be downloaded after successful payment.
- Article may be used according to SWS library access terms.
- Article cannot be redistributed.
