on output and, in particular, also on inflation in the euro area under alternative settings for monetary policy. We … that this over-proportionality is stronger for the fiscal multiplier on inflation than on output. We relate this finding to …

such environment the design of monetary policy above and at the lower bound constraint on short-term interest rates can be …

to inflation and not enough to adverse credit conditions. Reaction curves for the choice of policy-rule elasticity that …

changes in inflation and the output gap. On this basis, we assess the trade-off between economic stabilization and debt … sustainability depending on the monetary policy environment. In normal times, large public spending shocks may engender perverse debt …

. The risk of future regime shifts has encompassing effects on equilibrium. Inflation is systematically higher than it would … stability. This inflation bias is increasing in the real value of government debt. Regime-switching probabilities are not … interest rate sufficiently moderately when inflation increases. Lower fiscal dominance risk, in turn, mitigates the inflation …