Monetary and fiscal policy in Denmark

Analysis - October 2022 - No. 12

Authors Spange, Morten
Subject Monetary policy; Fixed-exchange-rate policy; Public finances and fiscal policy; The role of Danmarks Nationalbank
Type Analysis
Year 2022
Published 27 October 2022
Abstract icon The primary objective of monetary policy is to maintain low and stable inflation. In Denmark the objective is achieved by pegging the Danish krone to the euro. This entails that Danish monetary policy tracks the monetary policy conducted by the European Central Bank. To the extent that developments in the Danish economy deviate from the euro area, domestic fiscal policy can be used as a tool for stabilisation.