Global Fragmentation, Fiscal Rules, and Central Bank Independence
by Donghyun Park, John Beirne, Anh H. Le, Gazi Salah Uddin and Naoki Yago
We are pleased to announce the latest blog post on SUARA SEACEN, by Donghyun Park, John Beirne, Anh H. Le, Gazi Salah Uddin and Naoki Yago, titled “Global Fragmentation, Fiscal Rules, and Central Bank Independence”.
The authors empirically investigate the impact of global fragmentation on economic growth and public debt. In addition, they explore the mitigating role of fiscal rules and central bank independence. They find that fragmentation harms growth and increases debt. Fiscal rules mitigate the adverse impact of fragmentation on both growth and debt. Central bank independence amplifies the mitigating impact of fiscal rules, pointing to a synergy between fiscal and monetary policy. For central banks, the key message is that their independence is not only a safeguard for price stability but also a pillar of fiscal resilience.
Click here to read.
