The study discusses the distribution of roles between monetary and fiscal policy in stabilising the price level. It questions the view that price level stabilisation should be the sole responsibility of central banks. It argues that there is a case for national governments also being responsible...

Current developments in Greece make clear that the rules of the European Stability and Growth Pact (SGP) were neither strict enough nor enforced strictly enough. To deal with the ongoing exit from the fiscal crisis and its related phenomena, we propose a new framework for fiscal policy...