E62 - Fiscal Policy

• What People Believe About Monetary Finance and What We Can(’t) Do About It: Evidence from a Large-Scale, Multi-Country Survey Experiment

  Staff Working Paper 2023-36 Cars Hommes, Julien Pinter, Isabelle Salle

  We conduct a large-scale survey to shed light on what people believe about public finance. An experiment demonstrates that central bank communication can persistently shift views on monetary financing. It further suggests that views on monetary financing impact support for fiscal discipline.

  Content Type(s): Staff research, Staff working papers Topic(s): Central bank research, Fiscal policy, Monetary policy JEL Code(s): C, C8, C83, E, E5, E58, E6, E60, E62, E7, E70, G, G5, G53, H, H3, H31

• 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