This book analyzes the International Monetary Fund's (IMF) change of position on the role of fiscal policy, with particular emphasis on its call for a global fiscal expansion in the wake of the 2008 financial crisis—a seeming departure from the organization's long-held position that monetary policy, not fiscal policy, was the appropriate response to an economic slowdown. More specifically, it examines the IMF's views on how fiscal adjustment should be implemented across countries based on the state of their public finances, market pressures, and the state of the economy as well as the impact that fiscal adjustment would have on it. In countries that were not facing market pressures and had adopted credible medium-term fiscal adjustment plans, the IMF has recommended proceeding with deficit reduction at a steady, gradual pace, thus taking an intermediate position between the fiscal doves (who have argued that fiscal adjustment could be postponed altogether to provide continued support to demand) and the fiscal hawks (who have held that a front-loaded adjustment was needed to prevent a fiscal crisis.
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