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Model for Integrating Monetary and Fiscal Policies to Stimulate Economic Growth and Sustainable Debt Dynamics

Author

Listed:
  • V.A. Slepov
  • V.K. Burlachkov
  • T.P. Danko
  • M.E. Kosov
  • I.I. Volkov
  • N.V. Ivolgina
  • V.D. Sekerin

Abstract

This article examines the main integration trends of the state's monetary and fiscal policy in influencing economic growth and maintaining the sustainability of public debt. It is argued that the relationship between these trends of macroeconomic regulation is predetermined, on the one hand, by the potentially negative impact of fiscal expansion from the point of view of inflation, and by the negative impact of a likely state default in failing to refinance the debt from the Ministry of Finance, on the other hand. The paper studies the selected array of statistical data using the fiscal policy multipliers concept, the relationship between the effect of increase/decrease in budget expenditures, the slowdown in economic activity and the efforts by the Central Bank to offset fiscal measures, on the one hand, and the ratio of an increase/decrease in budget revenues and debt expenditures used to finance the budget investments, on the other hand. It is revealed that the investments are effective if implementing budget expenditures in the presence of the GDP gap and unrealized expectations of economic agents, while reducing spending in such a situation will intensify the recession. The GDP growth determined by these investments should provide the tax effect sufficient to cover the expenses. Otherwise, there can be negative effects of debt that establishes the need for measures to refinance public debt by the Central Bank. The conclusions of the paper can be used to assess the possible integration of monetary and fiscal policy based on various states.

Suggested Citation

  • V.A. Slepov & V.K. Burlachkov & T.P. Danko & M.E. Kosov & I.I. Volkov & N.V. Ivolgina & V.D. Sekerin, 2017. "Model for Integrating Monetary and Fiscal Policies to Stimulate Economic Growth and Sustainable Debt Dynamics," European Research Studies Journal, European Research Studies Journal, vol. 0(4A), pages 457-470.
    • Handle: RePEc:ers:journl:v:xx:y:2017:i:3a:p:457-470
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    Cited by:

    1. V. Ponkratov & A. Karaev & S. Solyannikova & O. Gorlova & D. Smirnov & O. Makashina, 2018. "Impact of Fiscal, Monetary and Structural Economic Policies on the Growth Rates of Leading Economies: 2000-2016," European Research Studies Journal, European Research Studies Journal, vol. 0(Special 3), pages 333-343.
    2. Kola Benson Ajeigbe & Fortune Ganda & Rawlings Obenembot Enowkenwa, 2024. "Impact of sustainable tax revenue and expenditure on the achievement of sustainable development goals in some selected African countries," Environment, Development and Sustainability: A Multidisciplinary Approach to the Theory and Practice of Sustainable Development, Springer, vol. 26(10), pages 26287-26311, October.
    3. repec:ers:journl:v:volumexxi:y:2018:i:issue4:p:622-636 is not listed on IDEAS
    4. V.A. Byvshev & N.E. Brovkina, 2018. "Credit Market and Economic Growth of Russia: Modeling Mutual Influence," European Research Studies Journal, European Research Studies Journal, vol. 0(4), pages 622-636.
    5. Michael Anthony Adams, 2020. "Fiscal Policy and Stock Market Efficiency in the USA: An ARDL Bounds Testing Approach," Journal of Accounting, Business and Finance Research, Scientific Publishing Institute, vol. 9(2), pages 73-81.

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    More about this item

    Keywords

    monetary policy; fiscal policy; budgetary policy multipliers; the Central Bank; economic growth; public debt JEL Classification: O10; E63;
    All these keywords.

    JEL classification:

    • O10 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development - - - General
    • E63 - Macroeconomics and Monetary Economics - - Macroeconomic Policy, Macroeconomic Aspects of Public Finance, and General Outlook - - - Comparative or Joint Analysis of Fiscal and Monetary Policy; Stabilization; Treasury Policy

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