捷克共和国的货币和财政政策联系

Monetaryand FiscalPolicy Linkages in the Lukas Boer and Allan Dizioli SIP/2026/035 IMF Selected Issues Papers are prepared by IMF staff asbackground documentation for periodic consultations withmember countries.It is based on the information available atthe time it was completed on March 4, 2026. This paper is also 2026APR Prepared by Lukas Boer and Allan Dizioli Authorized for distribution by Vincenzo Guzzo IMF Selected Issues Papersare prepared by IMF staff as background documentation for periodicconsultations with member countries.It is based on the information available at the time it was ABSTRACT:This paper uses scenario analysis to illustrate the implications of persistently higher fiscal deficitsfor monetary policy in the Czech Republic. It distinguishes across different types of fiscal spending andmonetary policy responses. The paper argues that coordinated action, explicitly accounting for the monetarypolicy response to a fiscal easing, can improve policy outcomes. The analysis is complemented by a historical RECOMMENDED CITATION:Boer, L. and A. Dizioli, 2026. “Monetary And Fiscal Policy Linkages in the CzechRepublic.” IMF Selected Issues Papers 2026/035. SELECTED ISSUES PAPERS Monetaryand FiscalPolicy Linkages in the Czech Republic Lukas Boer and Allan Dizioli1 CZECH REPUBLIC SELECTED ISSUES March4, 2026 ApprovedByEuropean Department Prepared By Lukas Boerand AllanDizioli (both EUR) CONTENTS MONETARY AND FISCAL POLICY LINKAGES IN THE CZECH REPUBLIC___________2 C. Monetary And Fiscal Policy Interactions in the Czech Republic ____________________4D. Scenario Analysis: The Effects of Persistently Higher Deficits ______________________8 1. Monetary and Fiscal Policy Tensions Defined as the Gap Between Fiscal andMonetary r* __________________________________________________________________________6 FIGURES 1. Monetary and Fiscal Policy Synchronization ______________________________________52. The Activeness of Fiscal Policy ____________________________________________________63. Monetary Policy under Alternative Fiscal Scenarios _______________________________10 MONETARY AND FISCAL POLICY LINKAGES IN THE This paper uses scenario analysis to illustrate the implications of persistently higher fiscal deficits formonetary policy in the Czech Republic. It distinguishes across different types of fiscal spending andmonetary policy responses. The paper argues that coordinated action, explicitly accounting for themonetary policy response to a fiscal easing, can improve policy outcomes. The analysis is A.Introduction 1.Longstanding and emerging spending pressures point to a deterioration in the fiscalposition in the years ahead.The Czech Republic faces significant structural spending demandsfrom population ageing, while emerging needs related to defense commitments and the energytransition add to these pressures (see REO 2025, chapter one). Without significant new revenue 2.Delivering on its mandate of price stability, the CNB would likely respond to a looserfiscal stance with tighter monetary policy, which could lead to several unintended consequences. Looser fiscal policy would in principle lead to fiscal dominance if monetary policy didnot respond appropriately and debt were perceived as unsustainable. This scenario is, however,unlikely in the Czech Republic given the CNB’s strong inflation targeting framework, institutional,independence, established credibility, and currently moderate levels of debt. Instead, inflationary 1.Higher public debt service costs, weighing on fiscal sustainability and constraining room forother spending.2.Crowding out of private investment, raising borrowing costs and dampening the intendedstimulative effects of fiscal measures. 3.Internalizing these unintended effects can help improve policy outcomes.Achievinglow and stable inflation requires an appropriate fiscal framework that ensures government debt sustainability.1Fiscal consolidation, or reprioritization of spending toward productivity-enhancingareas, would ease tensions between fiscal and monetary policy, reducing the need for monetarypolicy to offset fiscal-driven inflationary pressures. In general, coordination between the two policiescan improve macroeconomic stabilization. For instance, during the COVID-19 pandemic, fiscal policyand monetary policy acted in the same direction, easing the burden on monetary policy and 4.This paper examines past and future linkages between monetary and fiscal policy inthe Czech Republic.First, it starts with a literature review on monetary-fiscal interactions, summarizing findings on the impact of fiscal policy on inflation, the mutual transmission effectsbetween fiscal and monetary policy, and the potential benefits of policy coordination. Second, itprovides a historical account and a forward-looking assessment of monetary-fiscal policy dynamics B.Selected Literature on Monetary and Fiscal Policy Interactions 5.Monetary and fiscal policy are deeply int