Monetary/Fiscal Interactions 40 Years after “Unpleasant Monetarist Arithmetic”

In 1981, Thomas Sargent and Neil Wallace highlighted the importance of the budgetary connections between monetary and fiscal policy for the control of inflation. The consequences of relying on the printing press to cover intractable budget deficits have been made painfully evident through the experience of many hyperinflations throughout history. Yet this relationship remains at the forefront of research, and new questions arise in the current context of very low real rates and unprecedented levels of peacetime deficits throughout most of the advanced economies.

This conference brings together leading researchers to explore these new questions and think about avenues of fruitful further research.