It is shown that UMP increases output and inflation in the US, and generates spillovers to the Euro Area and. Thesis Chapter 3, examines the interaction between fiscal and monetary policy. In addition, the results of Persistence Profiles test,.e. This is because an active fiscal policy and a passive monetary policy can encourage private expenditure through a positive wealth channel. That means fiscal policy in Korea and the US is sustainable, while fiscal policy in the UK is not. An active fiscal policy means fiscal authorities set expenditure regardless of tax revenues, while a passive monetary policy refers to a weak response of the policy interest rate to inflation. The economic growth rate, government spending-based fiscal consolidation, low long-term interest rates, and higher sovereign risk have significant effects on reducing debt-to-GDP ratio. Full text available as: Printed Thesis Information: this thesis is comprised of six Chapters on US Conventional and Unconventional Monetary Policy and their interaction with fiscal policy, both domestically and internationally.
This is through a positive wealth effect. Second, there is a cointegrating relationship between the variables in Korea and the US, but not in the. Thesis, University of Birmingham. The results also show that fiscal consolidation in time of high debt-to-GDP ratios, the spending-base, or high sovereign risk has fewer negative effects on economic growth than fiscal consolidation in time of low debt-to-GDP ratios, the tax-base, or low sovereign risk. Third, fiscal consolidation is not likely to be expansionary in terms of GDP growth. The main findings are as follows. Subjects: H Social Sciences HB Economic Theory. Chapter 1 introduces the main themes of the thesis. Chapter 2 studies the theoretical background of the thesis.