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The aim of this paper is to evaluate mutual interaction of fiscal and monetary policy in the Czech Republic and in Slovakia. The relationship – cooperation or conflict, are basic determinants of successful implementation for economic policy of the state. Fiscal and monetary policies have usually different aims and some conflict situations may arise. The game-theoretical approach is responsible for creating the theoretical model, which is then dealt with the empirical analysis by the method of the ordinary least squares. We find a stabilizing role of monetary policy in both countries and the dominant role of monetary policy in the Czech Republic.

INTERACTION OF FISCAL AND MONETARY POLICY IN THE CZECH REPUBLIC AND SLOVAKIA