... in Europe, monetary interaction lowers inflation in Europe. On the other hand, it raises unemployment there. 279 274 5) Comparing monetary- fiscal interaction A and monetary- fiscal interaction ... supply shock in Europe. In case A, policy interaction achieves zero inflation in Europe. On the other hand, it raises unemployment and the structural deficit there. In case B, policy interaction ... On the other hand, it raises inflation and the structural deficit there. As an important result, the system of pure monetary interaction seems to be superior to the system of monetary and fiscal...