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Unsustainable fiscal policy: implications for monetary policy

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  • Nicholas Haltom
  • John A. Weinberg

Abstract

Federal government debt held by the public reached 67.7 percent of gross domestic product in 2011, and trends point to large budget deficits for many years to come. In this essay, economics writer Renee Haltom and research director John Weinberg explore the implications for monetary policy if the United States ever approached its "fiscal limit." In that scenario, the Federal Reserve might face pressure to produce inflation revenue. The authors conclude that the United States must avoid this scenario by placing fiscal policy on a more sustainable path

Suggested Citation

  • Nicholas Haltom & John A. Weinberg, 2011. "Unsustainable fiscal policy: implications for monetary policy," Annual Report, Federal Reserve Bank of Richmond, pages 5-19.
  • Handle: RePEc:fip:fedrar:y:2011:p:5-19
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    Keywords

    Monetary policy;

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