Inflation targeting and fiscal rules work best together
Sequencing also matters: the fiscal rule should be introduced first
Using a fiscal rule while running an inflation-targeting monetary policy regime leads to better results both for a country's fiscal situation and price stability, according to an IMF working paper that claims the two approaches have until now erroneously only been considered separately.
In Inflation Targeting and Fiscal Rules: Do Interactions and Sequencing Matter, Jean-Louis Combes, Xavier Debrun, Alexandru Minea and Rene Tapsoba find that the individual effects of inflation targeting and
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