Fiscal and monetary policy notes pdf

First, equilibrium requires that the real quantity of money equal the real demand for money. It also provides a matrix of the expected effects on gdp and interest rates when these policies are. That is why the government prepares its budget in such a way that both inflation and deflation are controlled. Classify the series of quotes based on whether they discuss monetary p olicy, fiscal. Fiscal and monetary policy northwestern university. Up to now, our notes have assumed that all of the government debt is short term. This note provides a summary of the primary fiscal and monetary policies. Define monetary policy, fiscal policy, price stability, maximum employment, economic growth, federal funds rate, inflation, and taxes. General aspects of monetary and fiscal policy coordination. In this sense, it might better have read the future of discretionary fiscal and monetary policy. Monetary and fiscal policy rules and their interaction nber. Identify the differences between monetary and fiscal policy. F iscal policy is the use of government spending and taxation to in.

There are two ways fiscal policy might matter for the price level. Fiscal policy, public debt and monetary policy in emes. A tight monetary policy consists of a slow rate of growth in the money supply and a high fed funds rate. I fiscal contractions can be good news for the economy. When the fed lends printed money, the money supply rises. Another short run objective of fiscal policy is the attainment of the goal of price stability. Mt plif kmonetary policy frameworks this training material is the property of the international monetary fund imf and is intended for the use in imf courses. View notes fiscal policy and monetary policy notes. A loose monetary policy consists of a high rate of growth in the money supply and a low fed funds rate. Monetary policy, fiscal policy and public debt management. Introduction during the 1980s and 1990s, the vulnerability of emes to shocks was often exacerbated by high fiscal deficits, underdeveloped domestic bond markets, and largecurrency and maturity mismatches.