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Post-crisis Fiscal Policy
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Post-crisis Fiscal Policy

Carlo Cottarelli, Philip Gerson, and Abdelhak Senhadji

Abstract

Fiscal policy makers have faced an extraordinarily challenging environment over the last few years. At the outset of the global financial crisis, the International Monetary Fund (IMF) for the first time advocated a fiscal expansion across all countries able to afford it, a seeming departure from the long-held consensus among economists that monetary policy rather than fiscal policy was the appropriate response to fluctuations in economic activity. Since then, the IMF has emphasized that the speed of fiscal adjustment should be determined by the specific circumstances in each country. Its recom ... More

Keywords: fiscal policy, financial crisis, International Monetary Fund, monetary policy, fiscal doves, fiscal hawks, fiscal adjustment, deficit reduction, sovereign debt, fiscal discipline

Bibliographic Information

Print publication date: 2014 Print ISBN-13: 9780262027182
Published to MIT Press Scholarship Online: September 2015 DOI:10.7551/mitpress/9780262027182.001.0001

Authors

Affiliations are at time of print publication.

Carlo Cottarelli, editor

Philip Gerson, editor

Abdelhak Senhadji, editor

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Contents

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Introduction

Carlo Cottarelli, Philip Gerson, and Abdelhak Senhadji

Part I Assessing Fiscal Sustainability: An Analytical Framework

2 Debt Dynamics and Fiscal Sustainability

Carlo Cottarelli and Julio Escolano

5 The Relationship between Debt Levels and Growth

Manmohan S. Kumar and Jaejoon Woo

Part II Buildup of Fiscal Vulnerabilities prior to the Crisis

7 Current Debt Crisis in Historical Perspective

S. Ali Abbas, Nazim Belhocine, Asmaa El-Ganainy, and Anke Weber

8 The Other Crisis: Sovereign Distress in the Euro Area

S. Ali Abbas, Nathaniel Arnold, Petra Dacheva, Mark De Broeck, Lorenzo Forni, Martine Guerguil, and Bruno Versailles

9 Has Taxation Contributed to the Crisis?

John Norregaard, Aqib Aslam, Dora Benedek, and Thornton Matheson

Part III Management of Fiscal Policy during the Crisis

10 Fiscal Policy Response in Advanced and Emerging Market Economies

Elif Arbatli, Thomas Baunsgaard, Alejandro Guerson, and Kyung-Seol Min

11 Fiscal Policy Response During the Crisis in Low-Income African Economies

Martine Guerguil, Marcos Poplawski-Ribeiro, and Anna Shabunina

12 Size of Fiscal Multipliers

Aiko Mineshima, Marcos Poplawski-Ribeiro, and Anke Weber

13 Coordination of Fiscal and Monetary Policies

Mika Kortelainen, Douglas Laxton, and Jack Selody

14 Financial Sector Support: Why Did Costs Differ So Much?

Ceyla Pazarbasioglu, Uffe Mikkelsen, and Suchitra Kumarapathy

15 Impact of the Crisis and Policy Response at the Sub-National Level

Borja Gracia, Jimmy McHugh, and Tigran Poghosyan

Part IV Post-Crisis Fiscal Outlook

16 Fiscal Outlook in Advanced and Emerging Markets

Laura Jaramillo and Pablo Lopez-Murphy

17 Escaping High Debt: The Narrow Path Ahead

Lorenzo Forni and Marialuz Moreno Badia

18 Institutional Reforms and Fiscal Adjustment

Xavier Debrun and Andrea Schaechter

19 Long-Term Fiscal Challenges

Baoping Shang and Mauricio Soto

20 Fiscal Adjustment, Growth, and Global Imbalances

Mika Kortelainen, Douglas Laxton, and Jack Selody

21 Policy Lessons from the Crisis and the Way Forward

Carlo Cottarelli, Philip Gerson, and Abdelhak Senhadji

End Matter