This chapter reviews the recent developments of the literature on monetary/fiscal policy interaction, the Fiscal Theory of Price Level (FTPL), and the implications for inflation dynamics. There are already excellent reviews of the FTPL, such as Leeper and Leith's (2016) handbook chapter and...

Against the backdrop of the COVID-19 pandemic, this paper analyzes the economic stimulus packages announced by the Indian national government and tries to identify some plausible fiscal and monetary policy coordination. The shrinking fiscal space due to revenue uncertainties has led to a...

This policy brief warns about the risks of discontinuing the policy responses to the COVID-19 crisis by pursuing exit strategies too early and/or too sharply. It outlines a comprehensive strategy for limiting such risks globally and offers an in-depth discussion of the European situation. Due to...

This work examines the impacts which the Covid-19 pandemic brought to the stability of the European financial sector. Lockdowns, businesses unable to operate and uncertainty about how the pandemic would evolve fueled a sharp recession. From the lessons learned in the global financial crises and...

Policymakers combine many different policy tools to achieve emission reductions. However, there remains substantial uncertainty around which mixes of policies are effective. This uncertainty stems from the predominant focus of ex post policy evaluation on isolating effects of single, known...

How should policymakers respond to uncertainty shocks? To analyze the macroeconomic effects of uncertainty shocks associated with various conventional structural shocks, we develop a New Keynesian model with borrowing constraints and time-varying volatility, which features a...

We study optimized monetary and fiscal feedback policy rules. The setup is a conventional New Keynesian DSGE model calibrated to match data from the euro area. Our aim is to welfare rank alternative tax-spending policy instruments used for shock stabilization and/or debt consolidation when, at...