Mon. Jul 15th, 2024

We present a review of the channels through which the US fiscal and monetary post-pandemic policies may affect the euro area. US spillovers will likely be relevant and worth considering while setting the policy stance in the euro area, at a crossroad between economic global recovery and global overheating.

A key role is going to be played by global financial markets, their appetite for open-ended stimulative policies and fears of hard disinflation scenarios affecting central banks’ ability to keep the economies on the recovery path and inflation expectations anchored. This paper was provided by the Policy Department for Economic, Scientific and Quality of Life Policies at the request of the Committee on Economic and Monetary Affairs (ECON) ahead of the Monetary Dialogue with the ECB President on 21 June 2021.

Source: In-Depth Analysis – Monetary and Fiscal Spillovers Across the Atlantic: The Role of Financial Markets – 17-06-2021

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