Inflation and the role of macroeconomic policies: A model for the case of Denmark

This paper provides an assessment of the different channels through which monetary, fiscal and income policies affect prices and output in a small open economy and discuss which policy measures are effective and feasible in the face of inflationary shocks. We build a stock-flow-consistent model usin...

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Autores principales: Raza, Hamid, Laurentjoye, Thibault, Byrialsen, Mikael Randrup, Valdecantos, Sebastián
Formato: Artículo publishedVersion
Lenguaje:Inglés
Publicado: Elsevier B.V. 2023
Materias:
Macroeconomía
Política Económica
Inflación
Acceso en línea:https://nulan.mdp.edu.ar/id/eprint/4077/
https://nulan.mdp.edu.ar/id/eprint/4077/1/raza-etal-2023.pdf
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Nulan - Fac.Cs.Económicas (UNMdP) de Universidad Nacional de Mar del Plata (UNMdP)
id I29-R135-4077
record_format dspace
spelling I29-R135-40772025-05-14T13:04:47Z Inflation and the role of macroeconomic policies: A model for the case of Denmark Raza, Hamid Laurentjoye, Thibault Byrialsen, Mikael Randrup Valdecantos, Sebastián This paper provides an assessment of the different channels through which monetary, fiscal and income policies affect prices and output in a small open economy and discuss which policy measures are effective and feasible in the face of inflationary shocks. We build a stock-flow-consistent model using sectoral data for Denmark. We then replicate the inflationary environment faced by Denmark and several other countries after the Covid-19 crisis. While taking monetary tightening as a forced policy response for a small open economy with fixed exchange rate, we explore a number of policies that, within the current institutional and legal framework, can potentially mitigate the effects of inflation. Our conclusion is that a close coordination of fiscal and income policies can help reduce the effects of adverse shocks to income without increasing inflation. Furthermore, we find that of all the policies implemented, monetary policy has the most dramatic effects on public debt sustainability. Elsevier B.V. 2023-07-05 https://nulan.mdp.edu.ar/id/eprint/4077/ application/pdf eng https://nulan.mdp.edu.ar/id/eprint/4077/1/raza-etal-2023.pdf Structural Change and Economic Dynamics, 67, 32-43. ISSN 0954-349X. 10.1016/j.strueco.2023.06.006 <https://doi.org/10.1016/j.strueco.2023.06.006> Dinamarca info:eu-repo/semantics/altIdentifier/doi/10.1016/j.strueco.2023.06.006 info:eu-repo/semantics/dataset/url/https://nulan.mdp.edu.ar/id/eprint/4083/ info:eu-repo/semantics/article info:ar-repo/semantics/artículo info:eu-repo/semantics/publishedVersion Fil: Raza, Hamid. Aalborg University, MaMTEP. Aalborg University Business School; Denmark. Fil: Laurentjoye, Thibault. Aalborg University, MaMTEP. Aalborg University Business School; Denmark. Fil: Byrialsen, Mikael Randrup. Aalborg University, MaMTEP. Aalborg University Business School; Denmark. Fil: Valdecantos, Sebastián. Aalborg University, MaMTEP. Aalborg University Business School; Denmark. Macroeconomía Política Económica Inflación info:eu-repo/semantics/openAccess https://creativecommons.org/licenses/by/4.0/deed.es
institution Universidad Nacional de Mar del Plata (UNMdP)
institution_str I-29
repository_str R-135
collection Nulan - Fac.Cs.Económicas (UNMdP)
language Inglés
orig_language_str_mv eng
topic Macroeconomía
Política Económica
Inflación
spellingShingle Macroeconomía
Política Económica
Inflación
Raza, Hamid
Laurentjoye, Thibault
Byrialsen, Mikael Randrup
Valdecantos, Sebastián
Inflation and the role of macroeconomic policies: A model for the case of Denmark
topic_facet Macroeconomía
Política Económica
Inflación
description This paper provides an assessment of the different channels through which monetary, fiscal and income policies affect prices and output in a small open economy and discuss which policy measures are effective and feasible in the face of inflationary shocks. We build a stock-flow-consistent model using sectoral data for Denmark. We then replicate the inflationary environment faced by Denmark and several other countries after the Covid-19 crisis. While taking monetary tightening as a forced policy response for a small open economy with fixed exchange rate, we explore a number of policies that, within the current institutional and legal framework, can potentially mitigate the effects of inflation. Our conclusion is that a close coordination of fiscal and income policies can help reduce the effects of adverse shocks to income without increasing inflation. Furthermore, we find that of all the policies implemented, monetary policy has the most dramatic effects on public debt sustainability.
format Artículo
Artículo
publishedVersion
author Raza, Hamid
Laurentjoye, Thibault
Byrialsen, Mikael Randrup
Valdecantos, Sebastián
author_facet Raza, Hamid
Laurentjoye, Thibault
Byrialsen, Mikael Randrup
Valdecantos, Sebastián
author_sort Raza, Hamid
title Inflation and the role of macroeconomic policies: A model for the case of Denmark
title_short Inflation and the role of macroeconomic policies: A model for the case of Denmark
title_full Inflation and the role of macroeconomic policies: A model for the case of Denmark
title_fullStr Inflation and the role of macroeconomic policies: A model for the case of Denmark
title_full_unstemmed Inflation and the role of macroeconomic policies: A model for the case of Denmark
title_sort inflation and the role of macroeconomic policies: a model for the case of denmark
publisher Elsevier B.V.
publishDate 2023
url https://nulan.mdp.edu.ar/id/eprint/4077/
https://nulan.mdp.edu.ar/id/eprint/4077/1/raza-etal-2023.pdf
work_keys_str_mv AT razahamid inflationandtheroleofmacroeconomicpoliciesamodelforthecaseofdenmark
AT laurentjoyethibault inflationandtheroleofmacroeconomicpoliciesamodelforthecaseofdenmark
AT byrialsenmikaelrandrup inflationandtheroleofmacroeconomicpoliciesamodelforthecaseofdenmark
AT valdecantossebastian inflationandtheroleofmacroeconomicpoliciesamodelforthecaseofdenmark
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