Compatibility of monetary and fiscal policy measures as an economic growth instrument: the case of the USA and Japan
Compatibility of monetary and fiscal policy measures as an economic growth instrument: the case of the USA and Japan

Summary/Abstract: Monetary and fiscal policies and measures are the primary instruments of creating general balance in the economy of a country. Their expansion or contraction depends on the defined goals and existing macroeconomic variables. In the case of the unification of east and West Germany, economists have found that a different macroeconomic environment requires a different combination of macroeconomic variables and the necessity for their dynamics (change) during the time. The global economic crisis in 2008 again raised the question of efficiency of the basic types of measures of the implemented policies. Research dealing with this topic, which are gaining more and more attention, show us the need for compatibility of monetary and fiscal policy measures and in this respect the creation of innovative models of implementation that are correlated with sustainable economic growth and development. The aim of this paper is to illustrate through the case of the developed countries like the USA and Japan the necessity of compatibility of monetary and fiscal policy measures as instruments for economic growth. At the time of the global economic crisis in 2008, these countries applied non-standard measures in resolving recession and achieving economic growth and thus innovated the previous models of economic policy. The paper examines the period from 2000 to 2016 and the dynamics of the following variables: GDP, unemployment rate, inflation, external debt coverage by GDP. The hypothesis of the research is that as the higher degree of compatibility of monetary and fiscal policy measures are, the greater their efficiency in economic growth and development are.

• Details
• Contents