Monetary Policy on the Way out of the Crisis

by Jürgen von Hagen on 1st December 2009

In this paper, commissioned by the European Parliament, Bruegel Visiting Scholar, Juergen von Hagen analyses the European and US monetary strategies during the crisis and points out that at the current moment coordination of monetary and fiscal exit strategies will be essential in order to avoid killing off the recovery before it has acquired full force. The author suggests that the risks of adverse macroeconomic developments are considerably less if fiscal policy exists from crisis mode first and monetary policy second.

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