Interakcje polityki pieniężnej i fiskalnej a niezależność banku centralnego – przegląd możliwych podejść modelowych w badaniach empirycznych
Interactions between monetary and fiscal policies and the independence of central bank

Author(s): Ryszard Kokoszczyński, Joanna Mackiewicz-Łyziak
Subject(s): Economy
Published by: Wydawnictwa Uniwersytetu Warszawskiego
Keywords: independence of central bank; monetary policy; fiscal policy
Summary/Abstract: There are numerous theoretical and empirical studies on interactions between monetary and fiscal policy. Even if the independence of central banks affects those interactions, it has rarely been directly included in those studies. In this chapter, we present two general approaches to empirical studies on interactions between those two policies and the possibilities for inclusion of independence of central banks in their modelling. Generally, the first approach has poor theoretic background and relies on simple models describing rules for fiscal and monetary policies. Those models also include proxies for some aspects of fiscal policy. Similarly, some simple measures usually address the independence of central banks. The second approach most often roots in the fiscal theory of the price level. The overwhelming majority of presented studies report a significant impact of the central banks’ independence in the form of a more sustainable policy using the first approach.

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