I study the role of fiscal policy in the monetary transmission mechanism. I present a novel decomposition of the equilibrium that links the wealth effect, i.e. the revaluation of households’ financial and human wealth, to the fiscal response to monetary policy. When monetary policy has fiscal...

In a highly interlinked global economy a key question for policy makers is how foreign shocks and policies transmit to the domestic economy. We develop a semi-structural multi-country model with rich real and financial channels of international shock propagation for the euro area, the US, Japan,...