Coordination of fiscal and monetary policy as a reflection of reality and projection

Abstract

Fiscal policy can be understood as a certain tax incentive that can achieve a positive effect on the financial market through certain transactions, so it is possible to view fiscal policy as an innovation that provides capital on the international market with its instruments, relying on an adequate monetary policy. Certainly, their mutual alignment and coordination comes to the fore especially in crisis economic situations, as well as projections that guide the further development of fiscal policy. Precisely, the need to harmonize two policies - monetary and fiscal, which can be functional but also institutionally interdependent, in this research are set in a certain correlation that can promote the economic activities of the state that needs to stabilize market operations, especially in conditions when the increasing interdependence of states is noticeable. The need, possibilities, as well as realistic indicators of coordination of fiscal and monetary policy are monitored through research in the Republic of Serbia, but also in the member states of the European Union, looking at them comparatively, giving indicators in the pre-crisis period, but also guidelines after the economic crisis period, especially after the pandemic, as well as projections that can point to distant coordinating processes of fiscal and monetary policy