Despite the increasing number of studies on monetary policy uncertainty, its role on the strategic interaction between fiscal and monetary policies has not been fully explored. Our paper aims to fill this gap by evaluating the consequences produced by multiplicative uncertainty in such a context.

In a recent paper in this journal [Demertzis, M., Hughes Hallett, A., Viegi, N., 2004. An independent Central Bank faced with elected governments: European Journal of Political Economy 20, 907-922.] we showed that, when voting is endogenised, an independent and conservative Central Bank will...