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Coordination of Monetary and Fi Scal Policy 1
| Content Provider | Semantic Scholar |
|---|---|
| Author | Marszałek, Paweł |
| Abstract | To achieve price stability, coordination of monetary and fi scal polices is required. The importance of coordination results from such premises as understanding the interdependence between monetary and fi scal policy, the role of central bank independence, the instruments-targets relation and fi nancial stability as well. The lack of coordination will result in inferior overall economic performance, whereas providing it will give a better outcome for both policymakers. Therefore, coordination may be treated as the necessary condition for achieving price stability. 1. Price stability as a context Nowadays broad consensus on benefi ts of price stability has emerged among economists. The prevailing opinion is, on the one hand, the consequence of infl ation costs, on the other – benefi ts of low and stable infl ation. It is generally accepted that low infl ation fosters a long-run economic growth and enhances social welfare, whereas high and variable infl ation increases uncertainty and deteriorates economic conditions (see e. The increasing importance of price stability (in economic theory and practice as well) contributed to the shift in the hierarchy of economic policy goals (Issing, 2000; Woodford, 2001). Reducing and controlling infl ation have become the foremost objective for policymakers. Along with it the role of central banks has increased. Their actions, connected with institutional changes, were generally suc-Volume 3 Number 2 2003 1 This article is an expanded and changed version of the paper " Monetary and fi scal policy: importance of coordination " , presented at Conference " Research of Contemporary Economics " (25– 26th May, Lubniewice, Poland). |
| File Format | PDF HTM / HTML |
| Alternate Webpage(s) | http://www.puereview.ae.poznan.pl/2003v3n2/4-marszalek.pdf |
| Language | English |
| Access Restriction | Open |
| Content Type | Text |
| Resource Type | Article |
