Running Head: MONETARY AND FISCAL POLICY. MONETARY AND FISCAL POLICY.
? 1 MONETARY AND FISCAL POLICY. 2 Active monetary and fiscal policy.
Monetary policy is not a position to control the evolution of the price level unless
supported by the fiscal agent (Canzoneri, 2016). In a macroeconomic model, the government
budget will entail the contribution of the active monetary policy and the fiscal policy. For the
monetary policy to be active there is the need in controlling the inflation of the fiscal agent. The
fiscal agent needs to act passively so that the agent should accept the specific role within