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Econometric analysis reveals monetary-fiscal policy synergy mitigates systemic risk in non-financial firms, highlighting the necessity of timed macroeconomic intervention.
Exploring the causal impact of monetary-fiscal policy synergy on systemic risk in non-financial firms (NFFs), we find a significant mitigating effect operating through four key channels: alleviating underinvestment, curbing corporate financialization, enhancing debt-servicing capacity, and reducing credit default risk. For NFFs with tighter financing constraints and more severe financial misallocation, the stabilizing efficacy of policy synergy is more pronounced—particularly during economic-financial contractions and as capital market openness advances, where the impact is strongest. Dynamic analysis further reveals a notable time-varying attenuation trend in this effect, underscoring the need for well-timed, precisely calibrated policy synergy to maintain resilience in the real economy.
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Zhang et al. (2026) studied this question.
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