Munich Personal RePEc Archive

Crowding Out of Monetary Policy as a Limitation of Fiscal Policy

Hiermeyer, Martin (2016): Crowding Out of Monetary Policy as a Limitation of Fiscal Policy.

[img]
Preview
PDF
MPRA_paper_73491.pdf

Download (361kB) | Preview

Abstract

If expansionary fiscal policy is inflationary, expansionary fiscal policy forces an inflation-targeting central bank to be somewhat more restrictive in its monetary policy. This altered central bank policy comes at a cost in terms of output which has to be calculated against the output gain achieved by the expansionary fiscal policy.

UB_LMU-Logo
MPRA is a RePEc service hosted by
the Munich University Library in Germany.