Well before the global financial crisis, the long-term trend in fiscal policy had raised concerns about risks for the outcomes of monetary policy. Are fears of an unpleasant monetarist arithmetic justified? To provide some insights, this paper examines strategic fiscal-monetary interactions in a...

Central bank can apply different kinds of monetary strategies. This paper analyses monetary strategy from the perspective of intermediate objectives. Right strategy should help to fulfil targeted goals. However, it is not easy to choose right strategy in right moment under certain economic...