The effects of macroeconomic policies under fixed exchange rates

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I hope that this paper will draw the attention of the scholars interested in studying the interactions between macroeconomic policies. The primary focus of our study is twofold: first, what are the effects of monetary and fiscal policies and second, how these policies react to each other as well as to other macroeconomic shocks. We provide evidence on non-Keynesian effects of fiscal tightening in Macedonia. Also, we show that fiscal authorities respond in a different manner in the two countries.

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