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Monetary and Fiscal Policy Coordination

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  • Hanif, Muhammad N.
  • Arby, Muhammad Farooq

Abstract

Macroeconomic policies are meant to achieve non-inflationary, stable growth. There are two major groups of policy instruments to achieve the purpose; one is related to monetary conditions and the other to fiscal conditions. Monetary instruments are employed by the central bank and fiscal instruments are employed by ministry of finance. The objectives and implications of policy measures taken by the two institutions often conflict with each other and thus call for policy coordination for effective implementation of policy decisions to achieve the set targets. The policy coordination has to be supported by concrete institutional and operating arrangements like monetary and fiscal coordination board. In Pakistan there was no concept of such policy coordination before financial sector reforms which were initiated in 1989-90. This financial reforms and restructuring process necessitated the monetary and financial policy coordination and a monetary and fiscal policy coordination board has been established in Pakistan

Suggested Citation

  • Hanif, Muhammad N. & Arby, Muhammad Farooq, 2003. "Monetary and Fiscal Policy Coordination," MPRA Paper 10307, University Library of Munich, Germany.
    • Handle: RePEc:pra:mprapa:10307
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    References listed on IDEAS

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    1. Turnovsky, Stephen J & d'Orey, Vasco, 1986. "Monetary Policies in Interdependent Economies with Stochastic Disturbances: A Strategic Approach," Economic Journal, Royal Economic Society, vol. 96(383), pages 696-721, September.
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    3. Bas van Aarle & Jacob Engwerda & Joseph Plasmans, 2002. "Monetary and Fiscal Policy Interaction in the EMU: A Dynamic Game Approach," Annals of Operations Research, Springer, vol. 109(1), pages 229-264, January.
    4. Michael Woodford, 2000. "Monetary Policy in a World Without Money," International Finance, Wiley Blackwell, vol. 3(2), pages 229-260, July.
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    Citations

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    Cited by:

    1. Muhammad Farooq Arby & Muhammad Nadeem Hanif, 2010. "Monetary and Fiscal Policies Coordination: Pakistan’s Experience," SBP Research Bulletin, State Bank of Pakistan, Research Department, vol. 6, pages 3-13.
    2. Damir Šehović, 2013. "General Aspects of Monetary and Fiscal Policy Coordination," Journal of Central Banking Theory and Practice, Central bank of Montenegro, vol. 2(3), pages 5-27.
    3. David Umoru & Harrison Ogbeide Eromosele, 2020. "Growth Stabilisation Effects of Macroeconomic Policy Coordination in Nigeria: An Econometric Analysis," Academic Journal of Economic Studies, Faculty of Finance, Banking and Accountancy Bucharest,"Dimitrie Cantemir" Christian University Bucharest, vol. 6(1), pages 51-60, March.
    4. Ebghaei, Felor, 2014. "Para ve Maliye Politikasının Karşılaştırmalı Analizi: Türkiye için Ekonometrik bir Analiz [Comparative Analysis of Monetary and Fiscal Policy: An Econometric Case Study of Turkey]," MPRA Paper 77892, University Library of Munich, Germany, revised Mar 2017.
    5. Shahid, Muhammad & Qayyum, Abdul & Shahid, Waseem, 2016. "Fiscal and Monetary Policy Interactions in Pakistan Using a Dynamic Stochastic General Equilibrium Framework," MPRA Paper 72595, University Library of Munich, Germany.
    6. Bandid Nijathaworn & Suwatchai Chaikhor & Suppakorn Chotika-arpa & Suchart Sakkankosone, 2015. "Monetary Policy and Foreign Exchange Management: Reforming Central Bank Functions in Myanmar," ADB Economics Working Paper Series 431, Asian Development Bank.
    7. Naeem Akram* & Syed Imran RAIS & Ihtsham Ul Haq PADDA**, 2011. "Synthesis of the Fiscal and Monetary Policies in Price Level Determination: Evidence from Pakistan," Pakistan Journal of Applied Economics, Applied Economics Research Centre, vol. 21, pages 37-52.
    8. Muhammad Ali Nasir & Alaa M. Soliman, 2014. "Aspects of Macroeconomic Policy Combinations and Their Effects on Financial Markets," Economic Issues Journal Articles, Economic Issues, vol. 19(1), pages 95-118, March.
    9. Muhammad Zahid Naeem & Chan Bibi, 2019. "Macroeconomic Determinants of Economic Growth under the Perspective of Monetary Policy in Pakistan: An Empirical Analysis," Bulletin of Business and Economics (BBE), Research Foundation for Humanity (RFH), vol. 8(3), pages 164-176, September.
    10. Syed Toqueer Akhter & Fahad Manzoor, 2015. "Openness of Economy, Foreign Investment Inflows and the Phenomenon of Rent Seeking Corruption," Eurasian Journal of Economics and Finance, Eurasian Publications, vol. 3(3), pages 45-64.

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    More about this item

    JEL classification:

    • E63 - Macroeconomics and Monetary Economics - - Macroeconomic Policy, Macroeconomic Aspects of Public Finance, and General Outlook - - - Comparative or Joint Analysis of Fiscal and Monetary Policy; Stabilization; Treasury Policy

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