E63 - Comparative or Joint Analysis of Fiscal and Monetary Policy; Stabilization; Treasury Policy

• Supporting the Transition to Net-Zero Emissions: The Evolving Role of Central Banks

  Staff Discussion Paper 2023-31 Karen McGuinness

  While climate change was largely tackled by government policies in the past, central banks are increasingly grappling with the risks climate change poses. They are evaluating their operational policies to reflect these risks and the transition to a net-zero economy. This paper explores the trade-offs and considerations central banks face.

  Content Type(s): Staff research, Staff discussion papers Topic(s): Central bank research, Climate change, Financial markets JEL Code(s): D, D5, D53, E, E5, E58, E6, E63, G, G3, G32, Q, Q5, Q54

• Understanding Inflation Dynamics: The Role of Government Expenditures

  Staff Working Paper 2023-30 Chang Liu, Yinxi Xie

  We study the impact government expenditure has on inflation. We find that changes in government expenditure account for a substantial portion of inflation variations. We also find that inflation and inflation expectations respond negatively to fiscal spending shocks, reaffirming the supply-side channel through which inflation responds to fiscal expansions.

  Content Type(s): Staff research, Staff working papers Topic(s): Central bank research, Fiscal policy, Inflation and prices JEL Code(s): E, E3, E6, E62, E63

• (Un)Conventional Monetary and Fiscal Policy

  Staff Working Paper 2023-6 Jing Cynthia Wu, Yinxi Xie

  We build a tractable New Keynesian model to study and compare four types of monetary and fiscal policy: policy rate adjustments, quantitative easing, lump-sum fiscal transfers and government spending. We find that tax-financed fiscal policy is more stimulative than debt-financed policy, and optimal policy coordination needs at least two of these four policy instruments.

  Content Type(s): Staff research, Staff working papers Topic(s): Fiscal policy, Monetary policy JEL Code(s): E, E4, E6, E61, E62, E63