Solving Fiscal Problems through Monetary Policy Mechanisms: Case of Armenia

Abstract

The problem of fiscal dominance tends to be most pronounced in emerging markets. The research subject is the monetary policy of the Central Bank of the Republic of Armenia and its participation in solving fiscal problems. The aim of the article is to analyze and assess fiscal dominance in the macroeconomic regulation of Armenia. The methodological basis of the study is a review of theoretical and practical models of fiscal dominance known in the scientific literature, as well as applying the most optimal models to the Armenian economy. The authors conclude that the tasks of fiscal policy are the priority of macroeconomic management, and monetary policy aims to solve fiscal problems.

Keywords

• monetary regulation
• monetary policy
• inflation
• fiscal policy
• fiscal dominance