عنوان انگلیسی مقاله:
Monetary financing and fiscal discipline
ترجمه فارسی عنوان مقاله:
تأمین مالی و انضباط مالی
Sciencedirect - Elsevier - International Review of Law & Economics, 68 (2021) 106004: doi:10:1016/j:irle:2021:106004
Rules governing monetary state financing vary across jurisdictions. The mainstream rationale for bans of
state financing rests on the empirical assumption that monetary financing undermines fiscal discipline.
We address the plausibility of this assumption by estimating local projection models for a panel of euro
area countries to explore the reaction of the sovereigns’ fiscal position to a monetary policy shock. Our
results suggest that fiscal discipline is not waning after an expansionary monetary policy innovation
that can be related to non-standard policy interventions, as expressed through an improvement of the
primary balance despite declining borrowing costs. While no compelling inferences can be made as to
the driving force of this improvement – political pressure channeled through conditionality may be a
plausible explanation – our results suggest that empirical claims on the adverse effect of unconventional
monetary policy on fiscal discipline are ill-founded.
Keywords: Monetary financing | Fiscal discipline | Local projections | Monetary policy surprises