亚开行-财政压力下的货币政策_财政主导的前瞻性分析（英）-2025.8_43页_2mb

Monetary Policy Under Fiscal Stress: A Forward-Looking Analysis of Fiscal Dominance

Summary

This paper examines the influence of fiscal imbalances on monetary policy through an augmented forward-looking Taylor rule framework. Key findings include:

1. Fiscal Dominance Effects: Central banks respond to fiscal balance expectations, with fiscal dominance being more pronounced in emerging economies. Expected fiscal deterioration leads to lower interest rates, driven by domestic debt concerns.

2. Policy Framework Interaction: Fiscal dominance is stronger in inflation-targeting emerging economies with low central bank independence. Budget balance fiscal rules increase monetary policy accommodation, while debt rules reduce fiscal dominance pressures.

3. External Debt Impact: Economies with high foreign-currency-denominated debt face exchange-rate effects, leading to higher interest rates for currency stabilization.

4. Recent Trends: Interest rate responses to fiscal imbalances strengthened in 2022–2023, posing challenges to policy goals.

The analysis underscores the importance of fiscal rules focusing on debt constraints and CB independence for mitigating fiscal dominance effects, particularly in emerging economies.