Ubide, Ángel, (2016), “The case for an active fiscal policy”, VoxEU, 11 Οctober
The pre-crisis consensus was, and remains, very strong – the business cycle would be managed by monetary policy, while fiscal policy would focus solely on debt sustainability. In a world of zero interest rates, however, fiscal policy has to contribute to supporting aggregate demand and protecting against deflationary risks. This column outlines three ways in which a well-designed expansionary fiscal policy stance can contribute to better economic outcomes.
Relevant Posts
- Salto, Matteo, (2016), “Fiscal Policy after the Crisis”, European Commission, Discussion Paper 35, July
- Frankel, Jeffrey, (2016), “Rediscovering Fiscal Policy at the G7”, Project Syndicate, 24 Μay