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RSCAS Seminar Series: It Takes Two to Tango: Monetary-fiscal policy interaction and inflation

Dates:
  • Wed 26 Nov 2014 17.30 - 18.30
  Add to Calendar 2014-11-26 17:30 2014-11-26 18:30 Europe/Paris RSCAS Seminar Series: It Takes Two to Tango: Monetary-fiscal policy interaction and inflation

The recent economic crisis started as a financial crisis in the US in 2008 and jumped over to Europe afterwards. On the one hand, central banks have been quick in cutting interest rates to dampen the consequences for the economy and to stimulate recovery. This policy resulted in interest rates close to the lower zero bound and, due to this reason, a variety of non-conventional monetary policy actions. On the other hand, huge stimulus programs and rescue packages for the financial sector have led to tremendous public debt levels which cumulated in Europe in a sovereign debt crisis. Finally, and most importantly, the Euro Area is now facing a period where both policies’ hands are tied.

The seminar will discuss recent economic concepts of monetary and fiscal policy interaction and how together they are determining the price level as well as examining historical evidence for monetary and fiscal policy interaction. It will also cover the former economic concept in the context of the European sovereign debt crisis, specifically Euro-specific reasons for the crisis, e.g., due to the institutional structure of the Euro Area and the probabilities of different ways out of the current economic slump.

Martin Kliem is an economist at the Research Centre of the Deutsche Bundesbank. He received his Ph.D. from Humboldt-University of Berlin in 2009. Currently, he is Pierre Werner Chair Fellow at the Robert Schuman Centre. His research agenda focuses on empirical and theoretical work on monetary economics, fiscal policy, and asset pricing.

Chair: Richard Portes

Seminar Room 2, Badia Fiesolana DD/MM/YYYY
  Seminar Room 2, Badia Fiesolana

The recent economic crisis started as a financial crisis in the US in 2008 and jumped over to Europe afterwards. On the one hand, central banks have been quick in cutting interest rates to dampen the consequences for the economy and to stimulate recovery. This policy resulted in interest rates close to the lower zero bound and, due to this reason, a variety of non-conventional monetary policy actions. On the other hand, huge stimulus programs and rescue packages for the financial sector have led to tremendous public debt levels which cumulated in Europe in a sovereign debt crisis. Finally, and most importantly, the Euro Area is now facing a period where both policies’ hands are tied.

The seminar will discuss recent economic concepts of monetary and fiscal policy interaction and how together they are determining the price level as well as examining historical evidence for monetary and fiscal policy interaction. It will also cover the former economic concept in the context of the European sovereign debt crisis, specifically Euro-specific reasons for the crisis, e.g., due to the institutional structure of the Euro Area and the probabilities of different ways out of the current economic slump.

Martin Kliem is an economist at the Research Centre of the Deutsche Bundesbank. He received his Ph.D. from Humboldt-University of Berlin in 2009. Currently, he is Pierre Werner Chair Fellow at the Robert Schuman Centre. His research agenda focuses on empirical and theoretical work on monetary economics, fiscal policy, and asset pricing.

Chair: Richard Portes


Location:
Seminar Room 2, Badia Fiesolana

Affiliation:
Robert Schuman Centre for Advanced Studies

Type:
Seminar
 
 

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