Monetary policy
for monetary policy and emphasized the efficacy of further monetary expansion where warranted. It’s still very much possible for the state to create extra money balances. However, monetary policy cannot be solely relied on. Its limitations as outlined above can be offset when used in conjunction with fiscal policy. Historically respective academics in the fields of monetarism and Keynesian economics would not necessarily subscribe to this view. However, the debate has evolved significantly over time to the extent that the simultaneous application of monetary and fiscal policy appears to be the winning formula in harsh economic climates.
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