The Policy Mix in Emerging Countries: The Case of Tunisia ★

The Policy Mix is often defined as the interaction between monetary policy and fiscal policy. These two policies are instruments of economic policy with the main objectives; full employment and lute against inflation. In this context, this paper will be devoted to the study of the interaction between monetary policy and fiscal policy in Tunisia, in order to clear the optimal policy mix for the Tunisian economy that would be able to solve the issues of unemployment and economic growth witnessed by Tunisia in recent years and especially bring our country out of the economic situation of “liquidity trap”. Thus, from the Structural VAR model, we were able to identify the effectiveness of expansionary fiscal policy in Tunisia. Indeed, an expansionary fiscal policy is accompanied instantly by a monetary policy to control inflation and by a short-term increase in the level of production due to the low mobility of capital in our country. The results also show that monetary and fiscal policies in Tunisia are crossed, indeed expansionary fiscal policy led to an intervention by the monetary authorities to increase the interest rates and consequently to implement a restrictive monetary policy.