Avrupa’da Para Politikası ve Maliye Politikaları İlişkisi Üzerine Bir Değerlendirme[An Assessment From the View of Interaction Between European Monetary Policy and Fiscal Policies]

In the Euro Area, the monetary policy is independently determined by the European Central Bank (ECB), whereas fiscal policies are determined by national governments. Public finance has become more important to protect and sustain the price stability (the primary objective of the ECB). After the 2008 financial crisis, the common monetary policy in the Euro Area becomes under the fiscal dominance of the national fiscal policies. The distinctive feature of this study is that this is one of the pioneering studies from the theoretical view of the fiscal dominance in the Euro Area. Besides the panel data analysis covering the period of 2002-2010 displayed that the total outstanding bonds of the 15 Euro Area countries are affected by the central government debt and the money in the circulation. So these unique results showed that the ECB’s independently determined monetary policy may somewhat be under the fiscal dominance of the national goverments.