As regards fiscal policies, euro area countries should not unravel past consolidation efforts and should put high government debt on a downward trajectory over the medium term. Fiscal strategies should be in line with the Stability and Growth Pact and should ensure a growthfriendly composition of consolidation which combines improving the quality and efficiency of public services with minimising distortionary effects of taxation.
The first type analyzes how various events, such as Federal Reserve statements; the release of minutes, testimony, or speeches by members of the Federal Open Market Committee (FOMC); and macroeconomic news affect market expectations of monetary policy. One simply compares the implied policy expectations before and after the event being studied.