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Fiscal Dominance: Implications for Bond Markets and Central Banking

Jean Barthélemy et al.

Annual Review of Financial Economics2025https://doi.org/10.1146/annurev-financial-112823-015801article
AJG 3ABDC B
Weight
0.50

Abstract

Fiscal dominance refers to situations in which monetary policy is constrained by the public sector's budget constraint. Large shifts in the dynamics of sovereign debts, surpluses, and central banks’ balance sheets since the great financial crisis have created the perception of a heightened risk of such fiscal dominance in major jurisdictions. This article reviews the theoretical and empirical literature on fiscal dominance. We offer a simple theory in which fiscal dominance arises as the outcome of strategic interactions between the government and the central bank.

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https://doi.org/https://doi.org/10.1146/annurev-financial-112823-015801

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@article{jean2025,
  title        = {{Fiscal Dominance: Implications for Bond Markets and Central Banking}},
  author       = {Jean Barthélemy et al.},
  journal      = {Annual Review of Financial Economics},
  year         = {2025},
  doi          = {https://doi.org/https://doi.org/10.1146/annurev-financial-112823-015801},
}

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Fiscal Dominance: Implications for Bond Markets and Central Banking

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Evidence weight

0.50

Balanced mode · F 0.40 / M 0.15 / V 0.05 / R 0.40

F · citation impact0.50 × 0.4 = 0.20
M · momentum0.50 × 0.15 = 0.07
V · venue signal0.50 × 0.05 = 0.03
R · text relevance †0.50 × 0.4 = 0.20

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