In this new report published by the New Economics Foundation (NEF), we argue that the traditional, strict separation between independent monetary policy and democratically set fiscal policy is insufficient for addressing the complex, overlapping crises of the 21st century. While central banks have historically focused almost exclusively on price stability through interest rate adjustments, the authors contend that intentional monetary-fiscal coordination is essential to tackle modern challenges like supply-side shocks, climate change, and persistent economic stagnation.
Recommended citation:
Prieg, L., Mang, S., Caddick, D., Jourdan, S. and Harris, T. (2025) How do you solve a problem like inflation? The case for monetary-fiscal coordination. New Economics Foundation. Available at: https://neweconomics.org/uploads/files/how-do-you-solve-a-problem-like-inflation.pdf.