Alan S. Blinder on Monetary and Fiscal Policy: Rowing with Both Oars
IMF Podcasts
The Coordinated Policy Effectiveness
Economics 101 teaches that monetary or fiscal policy can be used to manage aggregate demand. When there is excess demand, policies can be used to slow it down, and if there is insufficient demand, they can be used to boost it. While it may seem logical for these policies to work in unison, historical evidence shows that there are instances where only one policy is effective, or worse, they work in conflicting directions, which proves to be ineffective.
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