Scandinavian Working Papers in Economics
ESO-rapporter,
Expertgruppen för Studier i Offentlig ekonomi (Expert Group on Public Economics)
No 2023:1: Stability in the Balance – a Report on the Roles of Fiscal and Monetary Policy to the Expert Group on Public Economics
Lars Calmfors (), John Hassler () and Anna Seim ()
Additional contact information
Lars Calmfors: Institute for International Economic Studies, Postal: Stockholms universitet, Institutet för internationell ekonomi , 106 91 Stockholm
John Hassler: Institute for International Economic Studies, Postal: Stockholms universitet , Institutet för internationell ekonomi , 106 91 Stockholm
Anna Seim: Department of Economics, Postal: Stockholms universitet , Nationalekonomiska institutionen , 106 91 Stockholm
Abstract: The economic situation of the past years, with multiple macroeconomic shocks and a low interest rate environment, has changed the conventional view of how stabilisation policy ought to be conducted. When the interest rate cannot be further reduced, monetary policy becomes less effective. This places increased demands on fiscal policy for business cycle stabilisation. In 2022, the economic situation rapidly changed. Increases in inflation and in interest rates raise several questions about how – and by whom – stabilisation policy should be conducted. Since aggregate demand is affected by both fiscal and monetary policy, the interaction between them is crucial for stabilisation policy to be effective. This is the case regardless of the economic situation. In this report to the Expert Group on Public Economics (ESO), which was previously published in Swedish (2022:3 Samspel för stabilitet), the balance between fiscal and monetary policy in Sweden is analysed. The report summarises the state of knowledge and gives both a theoretical and an empirical review of the effects of fiscal and monetary policy. The authors also discuss the appropriate division of responsibilities between fiscal and monetary policy under new economic conditions and call for clear guidelines regarding the role of fiscal policy in business cycle stabilisation. Since the original publication of this report in Swedish, facts and diagrams have been updated to include more recent data.
Keywords: Budget; Finansiella kriser; Stabiliseringspolitik; Financial crises; Stabilization policy
Language: English
247 pages, January 26, 2023
Full text files
2023_1_Stability-in-the-Balance_eng_webb.pdfFull text
- Expertgruppen för Studier i Offentlig ekonomi (Expert Group on Public Economics)
- Home page for this series
Questions (including download problems) about the papers in this series should be directed to Charlotte Nömmera ()
Report other problems with accessing this service to Sune Karlsson ().
RePEc:hhs:esorep:2023_001This page generated on 2025-05-21 14:41:30.