Premium
The UK and the E urozone: Sovereign Debt Management and Monetary Policy
Author(s) -
Steele G. R.
Publication year - 2013
Publication title -
economic affairs
Language(s) - English
Resource type - Journals
SCImago Journal Rank - 0.24
H-Index - 18
eISSN - 1468-0270
pISSN - 0265-0665
DOI - 10.1111/ecaf.12035
Subject(s) - austerity , consolidation (business) , monetary policy , economics , monetary economics , debt , unemployment , interdependence , inflation targeting , financial system , finance , macroeconomics , politics , political science , law
Events in the wake of the ‘credit crunch’ can be understood only against institutional structures within which interdependent monetary and fiscal policy are administered. In the E urozone, the attempt to keep a central monetary authority (together with its associated national central banks) independent from 17 diverse fiscal authorities was flawed. When sovereign debt approaches unmanageable levels, the M aastricht T reaty presents austerity as the single option. In the UK , the electorate has an opportunity to choose between monetary financing (inflation) and fiscal consolidation (austerity). Policy choices within the Eurozone and the UK are set against K eynes's focus on unemployment and more recent concerns to retain (or restore) price and/or financial stability.