Afonso, António; Pereira, Francisco Gomes - 2024
This paper studies the impact of monetary policy on fiscal sustainability in the euro area. Our sample includes 12 euro …) monetary stance tends to lead to an increase (decrease) in the primary balance. Second, the ECB’s monetary policy stance … area countries and covers the period from 2003:Q1 to 2022:Q4. We extend a fiscal reaction function (Bohn’s rule) by …