Jump to ContentJump to Main Navigation
Remembering Inflation$
Users without a subscription are not able to see the full content.

Brigitte Granville

Print publication date: 2013

Print ISBN-13: 9780691145402

Published to Princeton Scholarship Online: October 2017

DOI: 10.23943/princeton/9780691145402.001.0001

Show Summary Details
Page of

PRINTED FROM PRINCETON SCHOLARSHIP ONLINE (www.princeton.universitypressscholarship.com). (c) Copyright Princeton University Press, 2022. All Rights Reserved. An individual user may print out a PDF of a single chapter of a monograph in PRSO for personal use.date: 21 May 2022

The Coordination of Monetary and Fiscal Policy

The Coordination of Monetary and Fiscal Policy

(p.93) Chapter 4 The Coordination of Monetary and Fiscal Policy
Remembering Inflation

Brigitte Granville

Princeton University Press

In considering the components of effective monetary policies to control inflation, the previous chapters have highlighted the decisive role played by credibility and shown how credibility can be established and enhanced through rules-based policy frameworks and independent agencies to implement such regimes. This chapter examines how the same test of credibility, hence supportive public expectations, must also be passed by fiscal policy. For if this fiscal test is failed, even the best designed monetary policy efforts will be unavailing. It also shows how transparent rule-based inflation targets can facilitate resolution of the most intractable fiscal problems. At the time of writing, such problems were most apparent in several of the countries that use the euro. Attempts to address concerns about their solvency by fiscal tightening were having the counterproductive effect of damaging growth, hence further increasing their debt-to-GDP ratios, and all the while raising the likelihood of a social and political backlash against higher taxes and spending cuts.

Keywords:   inflation, monetary policy, fiscal policy, solvency, euro, financial crisis

Princeton Scholarship Online requires a subscription or purchase to access the full text of books within the service. Public users can however freely search the site and view the abstracts and keywords for each book and chapter.

Please, subscribe or login to access full text content.

If you think you should have access to this title, please contact your librarian.

To troubleshoot, please check our FAQs , and if you can't find the answer there, please contact us.