[{"data":1,"prerenderedAt":-1},["ShallowReactive",2],{"detail-sidebar-cat-0-en-105":3,"doc-seo-321409-105":59,"doc-detail-321409-en":130},{"code":4,"msg":5,"data":6},0,"success",[7,13,18,23,28,33,38,43,48,51,55],{"id":8,"doc_module":4,"doc_module_name":9,"category_name":10,"show_sort_weight":11,"slug":12},1,"Document","Story & Novel",90,"story-novel",{"id":14,"doc_module":4,"doc_module_name":9,"category_name":15,"show_sort_weight":16,"slug":17},2,"Literature",80,"literature",{"id":19,"doc_module":4,"doc_module_name":9,"category_name":20,"show_sort_weight":21,"slug":22},4,"Exam",70,"exam",{"id":24,"doc_module":4,"doc_module_name":9,"category_name":25,"show_sort_weight":26,"slug":27},5,"Comic",60,"comic",{"id":29,"doc_module":4,"doc_module_name":9,"category_name":30,"show_sort_weight":31,"slug":32},6,"Technology",50,"technology",{"id":34,"doc_module":4,"doc_module_name":9,"category_name":35,"show_sort_weight":36,"slug":37},7,"Healthcare",40,"healthcare",{"id":39,"doc_module":4,"doc_module_name":9,"category_name":40,"show_sort_weight":41,"slug":42},8,"Research & Report",30,"research-report",{"id":44,"doc_module":4,"doc_module_name":9,"category_name":45,"show_sort_weight":46,"slug":47},9,"Religion & Spirituality",20,"religion-spirituality",{"id":46,"doc_module":4,"doc_module_name":9,"category_name":49,"show_sort_weight":46,"slug":50},"World Cup","world-cup",{"id":52,"doc_module":4,"doc_module_name":9,"category_name":53,"show_sort_weight":52,"slug":54},10,"Lifestyle","lifestyle",{"id":56,"doc_module":4,"doc_module_name":9,"category_name":57,"show_sort_weight":24,"slug":58},19,"General","general",{"code":4,"msg":60,"data":61},"ok",{"site_id":62,"language":63,"slug":64,"title":65,"keywords":66,"description":67,"schema_data":68,"social_meta":123,"head_meta":125,"extra_data":127,"updated_unix":129},105,"en","is-current-fiscal-policyan-obstacle-to-soundmonetary-policy","Is Current Fiscal Policyan Obstacle to SoundMonetary Policy?","","Debate over the interaction between fiscal and monetary policy is evaluated through the shift from a Keynesian belief in fine-tuning demand to a modern focus on long-run growth and price stability. The argument counters common objections: recession threats should not deter pursuing price stability, and monetary policy cannot offset harms from fiscal deficits. Sound policy is defined by clear objectives, verifiable outcomes, and consistently followed rules, with zero inflation as a verifiable long-term target.",{"@graph":69,"@context":122},[70,84,105],{"@type":71,"itemListElement":72},"BreadcrumbList",[73,77,79,82],{"item":74,"name":75,"@type":76,"position":8},"https://docshare.wps.com","Home","ListItem",{"item":78,"name":9,"@type":76,"position":14},"https://docshare.wps.com/document/",{"item":80,"name":40,"@type":76,"position":81},"https://docshare.wps.com/document/research-report/",3,{"item":83,"name":65,"@type":76,"position":19},"https://docshare.wps.com/document/is-current-fiscal-policyan-obstacle-to-soundmonetary-policy/321409/",{"url":83,"name":65,"@type":85,"image":86,"author":91,"headline":65,"publisher":94,"fileFormat":97,"inLanguage":63,"description":67,"dateModified":98,"datePublished":99,"encodingFormat":97,"isAccessibleForFree":100,"interactionStatistic":101},"DigitalDocument",{"url":87,"@type":88,"width":89,"height":90},"https://docshare.wps.com/thumbnails/is-current-fiscal-policyan-obstacle-to-soundmonetary-policy/321409.png","ImageObject",300,407,{"name":92,"@type":93},"Valentina","Person",{"url":74,"name":95,"@type":96},"DocShare","Organization","application/pdf","2026-10-29","2026-09-21",true,{"@type":102,"interactionType":103,"userInteractionCount":39},"InteractionCounter",{"@type":104},"ViewAction",{"@type":106,"mainEntity":107},"FAQPage",[108,114,118],{"name":109,"@type":110,"acceptedAnswer":111},"What is the core question addressed about fiscal and monetary policy?","Question",{"text":112,"@type":113},"The discussion centers on what fiscal policy implies for the conduct of monetary policy, and what monetary policy implies for the conduct of fiscal policy.","Answer",{"name":115,"@type":110,"acceptedAnswer":116},"Why does the text reject the idea that chasing price stability should be delayed by recession fears?",{"text":117,"@type":113},"It argues that recession threats should not interfere with the long-run goal of price stability because price stability reduces the risk of recession and supports growth.",{"name":119,"@type":110,"acceptedAnswer":120},"How does the document define “sound” monetary and fiscal policy?",{"text":121,"@type":113},"It requires clear objectives, verifiable outcomes, and rules consistently adhered to, so policy remains predictable and uncertainty about objectives and outcomes is minimized.","https://schema.org",{"og:url":83,"og:type":124,"og:title":65,"og:site_name":95,"og:description":67},"article",{"robots":126,"canonical":83},"index,follow",{"doc_id":128,"site_id":62},321409,1790473583,{"code":4,"msg":5,"data":131},{"doc_id":128,"user_id":132,"nickname":92,"user_avatar":133,"doc_module":4,"category_id":39,"category_name":40,"doc_title":65,"doc_description":67,"doc_content":134,"file_id":135,"file_url":136,"file_type":137,"file_size":138,"view_count":39,"is_deleted":4,"is_public":8,"is_downloadable":8,"audit_status":8,"page_count":34,"language":139,"language_code":63,"site_id":62,"html_lang":63,"table_of_contents":140,"faqs":141,"seo_title":142,"seo_description":67,"update_tm":143,"read_time":144,"preview_page_count":4},13056703020460,"https://ap-avatar.wpscdn.com/avatar/be000253dac470eee5d?_k=1778207105932848923","# Is Current Fiscal Policyan Obstacle to SoundMonetary Policy?\n\nby W.Lee Hoskins  \nKecently,there has been a new focusof debate among many economists andpolicymakers,centered around the rela-tionship between monetary and fiscalpolicy.The debate concems two ques-tions:what does fiscal policy implyabout the conduct of monetary policy,and what does monetary policy implyabout the conduct of fiscal policy?  \nMany learned economics at a timewhen the answer to this question couldbe found in the textbook Keynesian de-mand-management paradigm.Centralto this paradigm was a belief in the abil-ity of policymakers to fine-tune eco-nomic activity through judiciouschoices from a complementary mix offiscal and monetary policy instruments.The notion that higher levels of realeconomic activity could be boughtwith higher inflation was part and par-cel of this view of the world.As longas this idea prevailed,it was reasonableto presume that inflation was an inevita-ble,and acceptable,price to pay forsustained economic growth.  \nThe high unemployment and inflationof the 1970s effectively destroyed thisidea of a stable trade-off between infla-tion and unemployment.The misfor-tunes of that decade also led to growingskepticism about the ability of discre-tionary changes in fiscal or monetarypolicy to smooth the short-run cyclical  \nfluctuations in business activity.An im-pressive number of economists andpolicymakers now accept the idea thatthe goal of both fiscal and monetary pol-icies is to maximize long-run economicgrowth,and that price stability,in partic-ular,is the only contribution that mone-tary policy can make to this objective.  \nDespite this progress,there is concernbecause,too often,policy discussionsthat accept the goal of price stabilityproceed to question its attainability,re-tarding public acceptance.Acommonfear is the threat of recession that is fre-quently associated with the pursuit ofprice stability.Recently.I have arguedthat threats of recession should not in-terfere with the long-run goal of pricestability,because price stability actu-ally reduces the risk of recession and isa pro-growth policy.  \nYet another popular argument raisedagainst the goal of price stability statesthat we should not seek price stabilityuntil we have our fiscal house in order.Those who hold this view claim thatwe cannot commit to a policy of pricestability because large deficits causehigh interest rates,thereby limitingmonetary policy's ability to reduce in-flation under conditions reasonablyconsistent with full employment.  \nMust the pursuit of sound monetarypolicy await further progress towardmore desirable fiscal policies?Argu-ments that monetary policy must off-set the economic effects of fiscalpolicy choices may be based on falsepremises.  \nMy message is a simple one.Federalbudget deficits should not be allowedto compromise either the FederalReserve's goal of price stability or theadoption of a specific timetable toachieve it.Quite the contrary:poor mon-etary policy,which here will be equatedwith the failure to pursue a goal of pricestability,interferes with the pursuit of asensible long-term fiscal policy.This isnot to suggest or imply that current fis-cal policy is ideal,appropriate,or the re-sult of bad monetary policy.I believethat savings are too low,at least partlybecause of budget deficits,and that mea-sures to address our savings shortfallprobably must include measures to re-duce the deficit.However,while westrive for better fiscal policy,we shouldrecognize that monetary policy cannotoffset the harm caused by fiscal deficits;indeed,it can only add to those costs.  \n## ■ The Elements of Sound Policy\n\nEven policymakers who disagree on de-tails recognize that sound policies musthave clear objectives,verifiable out-comes,and rules that are consistentlyadhered to.Above all,predictable,veri-fiable policies ensure that individualeconomic decisions are made with aminimum of uncertainty about policyobjectives and outcomes.If this require-ment is satisf","cbCaibHALPY7xNKb","https://ap.wps.com/l/cbCaibHALPY7xNKb","pdf",1429412,"English","# Is Current Fiscal Policyan Obstacle to SoundMonetary Policy?\n# The Elements of Sound Policy","[{\"question\":\"What is the core question addressed about fiscal and monetary policy?\",\"answer\":\"The discussion centers on what fiscal policy implies for the conduct of monetary policy, and what monetary policy implies for the conduct of fiscal policy.\"},{\"question\":\"Why does the text reject the idea that chasing price stability should be delayed by recession fears?\",\"answer\":\"It argues that recession threats should not interfere with the long-run goal of price stability because price stability reduces the risk of recession and supports growth.\"},{\"question\":\"How does the document define “sound” monetary and fiscal policy?\",\"answer\":\"It requires clear objectives, verifiable outcomes, and rules consistently adhered to, so policy remains predictable and uncertainty about objectives and outcomes is minimized.\"}]","Is Current Fiscal Policyan Obstacle to SoundMonetary Policy? | PDF",1789959215,18]