Tax rules undermine monetary policy, hindering economic growth and investment.
The interaction between tax rules and monetary policy management is crucial. Failure to consider tax implications has led to underestimation of the impact of monetary policy. Easy-money policies aimed at boosting investment have actually hindered investment in plant and equipment due to our fiscal structure. Tightening monetary policy and offering positive fiscal incentives may be more effective than traditional approaches. The fiscal structure plays a key role in determining macroeconomic balance.