The Fiscal Effects of Monetary Policy

May 1, 1998

Preview Citation

Format: Chicago

Momi Dahan. The Fiscal Effects of Monetary Policy, (USA: International Monetary Fund, 1998) accessed December 26, 2024

Disclaimer: This Working Paper should not be reported as representing the views of the IMF.The views expressed in this Working Paper are those of the author(s) and do not necessarily represent those of the IMF or IMF policy. Working Papers describe research in progress by the author(s) and are published to elicit comments and to further debate

Summary

This paper develops a simple framework to examine the budgetary implications of monetary policy measures. It further outlines, using this framework, the various channels of influence that tight monetary policy may have on the budget deficit. The cumulative effect might be quantitatively large although each effect might be small. Most of the effects tend to increase the budget deficit as result of tight monetary policy, but tight monetary policy causes a short-run decrease in the government debt. Thus, macroeconomic policy coordination should be considered.

Subject: Budget planning and preparation, Government debt management, Monetary aggregates, Monetary tightening, Public debt

Keywords: Nominal exchange rate, WP

Publication Details

Pages:

19
Volume:

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DOI:

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Issue:

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Series:

Working Paper No. 1998/066
Stock No:

WPIEA0661998
ISBN:

9781451962185
ISSN:

1018-5941

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