The Fiscal Consequences of Missing an Inflation Target / Michele Andreolli, Hélène Rey.

Format:

Book

Author/Creator:

Andreolli, Michele.

Contributor:

National Bureau of Economic Research.

Rey, Hélène.

Series:

Working Paper Series (National Bureau of Economic Research) no. w30819.

NBER working paper series no. w30819

Language:

English

Physical Description:

1 online resource: illustrations (black and white);

Place of Publication:

Cambridge, Mass. National Bureau of Economic Research 2023.

Summary:

The European Central Bank is unique in setting monetary policy for several sovereign states with heterogeneous debt levels and different maturity structures. The monetary-fiscal nexus is central to the functioning of the euro area. We focus on one particular aspect of that nexus, the effect the reliability of the European Central Bank's monetary policy on public finances. We show that when the ECB misses its inflation target this has large heterogeneous fiscal consequences for Euro Area countries. For comparison we also estimate the fiscal consequences of the Federal Reserve and the Bank of England missing their inflation targets. They are also sizeable.

Notes:

Print version record

January 2023.