Professor Giancarlo Corsetti has co-authored (with Luca Dedola, Marek Jarociński, Bartosz Maćkowiak, Sebastian Schmidt) an ECB Discussion Paper on ""Macroeconomic Stabilization, Monetary-fiscal Interactions, and Europe’s Monetary Union".

Abstract:
The euro area has been experiencing a prolonged period of weak economic activity and very low inflation. This paper reviews models of business cycle stabilization with an eye to formulating lessons for policy in the euro area. According to standard models, after a large recessionary shock accommodative monetary and fiscal policy together may be necessary to stabilize economic activity and inflation. The paper describes practical ways for the euro area to be able to implement an effective monetary-fiscal policy mix.

Paper:
https://www.ecb.europa.eu/pub/pdf/scpwps/ecbwp1988.en.pdf

Published on - Thursday 15th December 2016

Macroeconomics

Stability

Monetary

Fiscal