INFLUENCE OF MONETARY AND FISCAL POLICIES ON ECONOMIC STABILITY IN A MACROECONOMIC FRAMEWORK
DOI:
https://doi.org/10.29121/granthaalayah.v12.i9.2024.6666Keywords:
Macroeconomic Stability, Monetary Policy, Fiscal Policy, Economic Volatility, Policy CoordinationAbstract [English]
In this context economic stability in macroeconomic terms has emerged as a major imperative in economic policy-making, especially in the face of economic uncertainties and financial integration. In this research, an attempt has been taken to focus on the influence of monetary and fiscal policy on economic stability in a macroeconomic context. Based on a descriptive and analytical method of analysis using secondary data sources in a macroeconomic context, this research aims to identify and assess key indicators of economic volatility, fiscal balance, and debt in order to arrive at a conclusive result regarding the effectiveness of economic policy measures. From the results, it has been determined that economic stability is closely related to disciplined monetary policy, especially in restraining inflation volatility, while fiscal policy sustainability assumes great significance in limiting fluctuations in terms of economic output. Furthermore, this research reveals that imbalances in terms of debt levels, coupled with policy inconsistencies, tend to further destabilize the economy.
Downloads
References
Agenor, P. R., Alper, K., and da Silva, L. P. (2018). Capital Regulation, Monetary Policy, and Financial Stability. International Journal of Central Banking, 32.
Agénor, P. R., and Flamini, A. (2016). Institutional Mandates for Macroeconomic and Financial Stability (Centre for Growth and Business Cycle Research Discussion Paper Series No. 231).
Agénor, P. R., and Pereira da Silva, L. A. (2023). Towards a New Monetary-Macroprudential Policy Framework: Perspectives on Integrated Inflation Targeting. In Macro‑Financial Stability Policy in a Globalised World: Lessons from International Experience (618-673). https://doi.org/10.1142/9789811259432_0030 DOI: https://doi.org/10.1142/9789811259432_0030
Arifin, A., Sugiyanto, F. X., Widodo, W., and Firmansyah, F. (2017). Macroeconomic Stability in Indonesia: Fiscal and Monetary Policies' Framework. Journal of Economic & Management Perspectives, 11(4), 341-350.
Bova, E., Medas, P., and Poghosyan, T. (2018). Macroeconomic Stability in Resource‑Rich Countries: The Role of Fiscal Policy. Journal of Banking and Financial Economics, 1(9), 103-122. https://doi.org/10.7172/2353-6845.jbfe.2018.1.5 DOI: https://doi.org/10.7172/2353-6845.jbfe.2018.1.5
Chugunov, I., Pasichnyi, M., Koroviy, V., Kaneva, T., and Nikitishin, A. (2021). Fiscal and Monetary Policy of Economic Development. European Journal of Sustainable Development, 10(1), 42-42. https://doi.org/10.14207/ejsd.2021.v10n1p42 DOI: https://doi.org/10.14207/ejsd.2021.v10n1p42
Goldberg, J. E., Klee, E., Prescott, E. S., and Wood, P. R. (2020). Monetary Policy Strategies and Tools: Financial Stability considerations. https://doi.org/10.17016/feds.2020.074 DOI: https://doi.org/10.17016/feds.2020.074
Martinez‑Miera, D., and Repullo, R. (2019). Monetary Policy, Macroprudential Policy, and Financial Stability. Annual Review of Economics, 11(1), 809-832. https://doi.org/10.1146/annurev-economics-080218-025625 DOI: https://doi.org/10.1146/annurev-economics-080218-025625
Nikiforov, P., Greshko, R., Marych, M., Marusiak, N., Kharabara, V., and Gladchuk, O. (2022). Mutual Influence of Fiscal and Monetary Policy in the Context of Ensuring Macro‑Financial Stability of the State. Management Theory and Studies for Rural Business and Infrastructure Development, 44(4), 435-442. https://doi.org/10.15544/mts.2022.43 DOI: https://doi.org/10.15544/mts.2022.43
Slepov, V. A., Burlachkov, V. K., Danko, T. P., Kosov, M. E., Volkov, I. I., Ivolgina, N. V., and Sekerin, V. D. (2017). Model for Integrating Monetary and Fiscal Policies to Stimulate Economic Growth and Sustainable Debt Dynamics. https://doi.org/10.35808/ersj/847 DOI: https://doi.org/10.35808/ersj/847
Smets, F. (2018). Financial Stability and Monetary Policy: How Closely Interlinked? International Journal of Central Banking, 35th.
Tan, C. T., Mohamed, A., Habibullah, M. S., and Chin, L. (2020). The Impacts of Monetary and Fiscal Policies on Economic Growth in Malaysia, Singapore and Thailand. South Asian Journal of Macroeconomics and Public Finance, 9(1), 114-130. https://doi.org/10.1177/2277978720906066 DOI: https://doi.org/10.1177/2277978720906066
Unsal, D. F. (2018). Capital Flows and Financial Stability: Monetary Policy and Macroprudential Responses. International Journal of Central Banking, 30th.
Weerakoon, D., and Hewage, K. (2017). Fiscal Policy, Growth and Macroeconomic Stability. In Tax Policy in Sri Lanka: Economic Perspectives (17).
Yevdokimov, Y., Melnyk, L., Lyulyov, O., Panchenko, O., and Kubatko, V. (2018). Economic Freedom and Democracy: Determinant Factors in Increasing Macroeconomic stability. Problems and Perspectives in Management, 16(2), 279-290. https://doi.org/10.21511/ppm.16(2).2018.26 DOI: https://doi.org/10.21511/ppm.16(2).2018.26
Published
How to Cite
Issue
Section
License
Copyright (c) 2024 Done Thirupati, Dr. Jyoti Kanamadi
This work is licensed under a Creative Commons Attribution 4.0 International License.
With the licence CC-BY, authors retain the copyright, allowing anyone to download, reuse, re-print, modify, distribute, and/or copy their contribution. The work must be properly attributed to its author.
It is not necessary to ask for further permission from the author or journal board.
This journal provides immediate open access to its content on the principle that making research freely available to the public supports a greater global exchange of knowledge.
