Posted on April 15, 2015 by iMFdirect
By Vitor Gaspar
Does fiscal policy respond systematically to economic activity? Can fiscal policy promote macroeconomic stability? Does greater stability support stronger growth? The answer is yes on all counts. This finding, while seemingly obvious, is now backed by numbers to match each question. The April 2015 Fiscal Monitor explores how.
Filed under: Advanced Economies, Economic Crisis, Economic outlook, Economic research, Employment, Finance, Financial Crisis, Fiscal, Fiscal policy, growth, IMF, International Monetary Fund, Reform | Tagged: advanced economies, financial volatility, Fiscal Monitor, fiscal policy, Fiscal rules, fiscal stabilization, macroeconomic stability, public finances | Leave a comment »
Posted on November 4, 2010 by iMFdirect
By Olivier Blanchard and Carlo Cottarelli
(Version in عربي | 中文 | Español | Français | Русский )
How can governments have their cake and eat it too? How can fiscal policy provide sufficient support to economic activity, and reassure markets that fiscal solvency is not at risk? The poor state of fiscal accounts of most advanced countries calls for austere fiscal policies, before the confidence crisis that is now hitting a few small advanced economies spreads to the larger ones. But not right now: a frontloaded adjustment—that is a tightening that is not gradual but falls disproportionately early in the adjustment phase—could destabilize the recovery.
But can countries limit frontloading and still achieve credibility? Yes, but baking the right fiscal pie is likely to require a number of ingredients. While the exact recipe depends on country circumstances, here are our suggested ingredients. Continue reading
Filed under: Advanced Economies, Economic Crisis, Fiscal policy, IMF, International Monetary Fund, Public debt | Tagged: budget execution, budget preparation, deficit ceilings, economic recovery, Fiscal Monitor, fiscal policy, Fiscal rules, fiscal solvency, fiscal transparency, frontloaded adjustment, government spending ceilings | 9 Comments »