Understanding the Nexus Between Price Stability, Financial Stability, and Fiscal Sustainability for a Strong Economy

The article "The nexus between price stability, financial stability and fiscal sustainability" talks about three important things that are connected to each other: price stability, financial stability, and fiscal sustainability.

Price stability means that the prices of things we buy and sell stay about the same over time. This is important because if prices go up too quickly, people might not be able to afford basic things like food or housing.

Financial stability means that the banking and financial systems are working well, and people have confidence in them. This is important because if the financial system isn't stable, people might not be able to access money when they need it, or businesses might not be able to get loans to grow.

Fiscal sustainability means that the government is able to keep paying its bills over time. This is important because if the government can't pay its bills, it might have to cut services like healthcare or education.

All of these things are connected to each other. For example, if the government spends too much money, it might cause inflation (when prices go up too quickly), which can hurt price stability. It can also make it harder for the government to pay its bills over time, which can hurt fiscal sustainability.

Similarly, if the financial system isn't stable, it can cause problems for the economy as a whole, which can hurt both price stability and fiscal sustainability.

So, it's important to think about all of these things together when we're making decisions about the economy. We need to make sure that the prices of things stay stable, the financial system is working well, and the government is able to keep paying its bills over time.

Original article:The nexus between price stability, financial stability and fiscal sustainability