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Hardcover | $67.00 Short | £49.95 | ISBN: 9780262027182 | 576 pp. | 8 x 9 in | 170 figures, 63 tables | June 2014
eBook | $44.00 Short | ISBN: 9780262324106 | 576 pp. | 170 figures, 63 tables | June 2014

Post-crisis Fiscal Policy

Overview

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 recommendation that deficit reduction proceed steadily, but gradually, positions the IMF between the fiscal doves (who argue for postponing fiscal adjustment altogether) and the fiscal hawks (who argue for a front-loaded adjustment). This volume brings together the analysis underpinning the IMF’s position on the evolving role of fiscal policy.

After establishing its analytical foundation, with chapters on such topics as fiscal risk and debt dynamics, the book analyzes the buildup of fiscal vulnerabilities before the crisis, presents the policy response during the crisis, discusses the fiscal outlook and policy challenges ahead, and offers lessons learned from the crisis and its aftermath. Topics discussed include a historical view of debt accumulation; the timing, size, and composition of fiscal stimulus packages in advanced and emerging economies; the heated debate surrounding the size of fiscal multipliers and the effectiveness of fiscal policy as a countercyclical tool; coordination of fiscal and monetary policies; the sovereign debt crisis in Europe; and institutional reform aimed at fostering fiscal discipline.

Contributors
Ali Abbas, Nate Arnold, Aqib Aslam, Thomas Baunsgaard, Nazim Belhocine, Dora Benedek, Carlo Cottarelli, Petra Dacheva, Mark De Broeck, Xavier Debrun, Asmaa ElGanainy, Julio Escolano, Lorenzo Forni, Philip Gerson, Borja Gracia,, Martine Guerguil, Alejandro Guerson, Laura Jaramillo, Jiri Jonas, Mika Kortelainen, Manmohan Kumar, Suchitra, Kumarapathy, Douglas Laxton, Pablo Lopez-Murphy, Thornton Matheson, Jimmy McHugh, Uffe Mikkelsen, Kyung-Seol Min, Aiko Mineshima, Marialuz Moreno, John Norregaard, Ceyla Pazarbasioglu, Iva Petrova, Tigran Poghosyan, Marcos Poplawski-Ribeiro, Anna Shabunina, Andrea Schaechter, Jack Selody, Abdelhak Senhadji, Baoping Shang, Mauricio Soto, Bruno Versailles, Anke Weber, Jaejoon Woo, Li Zeng

About the Editors

Carlo Cottarelli is Commissioner of Public Spending Reform in Italy and Former Director of the International Monetary Fund’s Fiscal Affairs Department.

Philip Gerson is Deputy Director of the International Monetary Fund’s European Department.

Abdelhak Senhadji is Assistant Director of the International Monetary Fund’s Fiscal Affairs Department.

Endorsements

Post-crisis Fiscal Policy gives a much-needed, and seminal, analysis of the fiscal problems in the wake of the 2008 financial crisis. It describes countries’ response to these problems, draws important lessons from the crisis, and provides a thoughtful discussion of the daunting challenges ahead for the global economy.”
George Akerlof, Professor of Economics, University of California at Berkeley; Nobel Laureate in Economics, 2001
“This book is an impressive collection of insightful and well-researched papers by IMF experts covering a wide range of important fiscal policy issues and drawing key lessons from the global economic and financial crisis. Post-crisis Fiscal Policy offers a unique perspective on the evolving role of fiscal policy that is enlightened by the collective experience of the IMF’s universal membership. While rigorous in its approach, the book is written for a wide audience. This timely book is a must-read for anyone interested in fiscal policy and the daunting economic challenges lying ahead.”
Alan J. Auerbach, Professor of Economics and Director of the Robert D. Burch Center for Tax Policy and Public Finance, University of California, Berkeley
“This book is an impressive collection of insightful and well-researched papers by IMF experts covering a wide range of important fiscal policy issues and drawing key lessons from the global economic and financial crisis. Post-crisis Fiscal Policy offers a unique perspective on the evolving role of fiscal policy that is enlightened by the collective experience of the IMF’s universal membership. While rigorous in its approach, the book is written for a wide audience. This timely book is a must-read for anyone interested in fiscal policy and the daunting economic challenges lying ahead.”
Pier Carlo Padoan, Minister of Economy and Finance, Italy
“The global financial crisis ushered in a new age for fiscal policy. After decades of neglect as a tool of stabilization policy, it was suddenly called upon to play a central role. This remarkable volume examines the design, measurement, and implementation of fiscal policy, blending insightful commentary of general principles with detailed analyses of individual nations. Lessons will be learned from this crisis for decades to come, and these collected essays will be an invaluable resource for researchers and policy makers alike.”
James Poterba, Mitsui Professor of Economics, MIT; President, National Bureau of Economic Research
“This timely book pulls together an impressive array of evidence about how fiscal policies—the ways governments systematically set taxes, transfers, and expenditures, and how they pay or reschedule their debts—were influenced by the recent worldwide financial crisis and how those policies in turn affected the severity with which the crisis impacted different countries and groups of people. The evidence cited in this book and the way it is organized teaches many important lessons about what happened and how to avoid past mistakes.”
Thomas Sargent, Professor of Economics at New York University; Recipient of the 2011 Nobel Prize in Economics