The Interaction Between Monetary and Fiscal Policies (Working Paper 30)
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Authors
Dodge, David
Date
2002-06
Type
working paper
Language
en
Keyword
Monetary Policies , Fiscal Policies , Economic Policy , Economic Conditions , Canada
Alternative Title
Abstract
One can view the period since 1970 as one in which the authorities struggled to establish
appropriate medium-term anchors for both monetary and fiscal policies. During this time, they
learned about the appropriate interaction between those two policies in the context of economic
stabilization and growth under a flexible exchange rate regime. This lecture deals with four
interrelated topics: the appropriate goals for fiscal and monetary policy, building policy credibility, the
appropriate stabilization role for the two policies, and policy cooperation. The transparent medium term
frameworks that have been established by the authorities will be extremely helpful in meeting
the challenges that the future is sure to bring. These frameworks mean that the required adjustments
in the economy will take place against a relatively stable background.
Thank you for the invitation to give the
Gow Lecture for 2002. Donald Gow had a
great interest in public administration and
in budgetary reform in the federal government
(Gow 1973). He was one in a long
line of