Rethinking Fiscal Policy after the Crisis

After the financial crisis, what important lessons can we learn from fiscal policy? This book provides an answer to this question.

?udovít Ódor (Edited by)

9781316613689, Cambridge University Press

Paperback / softback, published 19 December 2019

614 pages, 107 b/w illus. 45 tables
15.2 x 22.9 x 3.2 cm, 0.7 kg

'In this collection of essays, some of the most prominent economists in the field analyse fiscal policy issues today. The resulting book is of excellent academic quality, touching on topical subjects relevant to both academic and policy circles.' Evi Pappa, European University Institute, Florence

Before the financial crisis, fiscal policy often played a secondary role to monetary policy, with the manipulation of interest rates to hit inflation targets being the main instrument of macroeconomic management. However, after the financial crisis and the subsequent euro crisis, fiscal policy has been brought back to the fore. In the past, the limited understanding of the effects of fiscal policy, neglect of monetary-fiscal interactions, faulty institutional set ups or ignorance of market expectations often led to bad policies. This book, written by a team of leading economists, seeks to address the current oversight of fiscal policy and to upgrade our understanding and conduct of fiscal policy, presenting a well-balanced diagnosis and offering several important lessons for future fiscal analysis and policymaking. It is an essential read for academics and graduate students focused on the current debate over fiscal policy, as well as policymakers working on day-to-day policy issues.

1. Introduction and overview ?udovít Ódor
Part I. Frontiers of Fiscal Policy: 2. Fiscal analysis is darned hard Eric M. Leeper
3. Fiscal implications of central bank balance sheet policies Athanasios Orphanides
Part II. Better Institutions for Better Fiscal Policy: 4. Fiscal rules in the world Klaus Schmidt-Hebbel and Raimundo Soto
5. Fiscal councils: rational and effectiveness Roel W. M. J. Beetsma and Xavier Debrun
6. Fiscal discipline in a monetary union without fiscal union Charles Wyplosz
7. Lost in complexity. Towards a decentralised and de-politicised fiscal framework in Europe ?udovít Ódor and Gábor P. Kiss
8. Partial fiscalisation: some historical lessons on Europe´s unfinished business Michael Bordo and Harold James
9. Managing the euro area debt crisis George Kopits
Part III. New Analytical Perspectives: 10. Problems with deficit accounting Jerry R. Green and Laurence J. Kotlikoff
11. Fiscal policy and financial distress: a balance sheet perspective John Fitzgerald and Philip R. Lane
12. Financial cycles and fiscal cycles Agustín S. Bénétrix and Philip R. Lane
13. Fiscal sustainability and the financial cycle Claudio Borio, Marco Lombardi and Fabrizio Zampolli
14. Calibrating the cost of defaulting in models of sovereign defaults Juan Carlos Hatchondo and Leonardo Martinez
Part IV. The Comeback of Discretionary Fiscal Policy: 15. What do we know about fiscal multipliers? Carlo Favero and Madina Karamysheva
16. Government as borrower and innovator of last resort Richard C. Koo
17. Fiscal consolidation strategies Christian Kastrop, Boris Cournéde, Falilou Fall and Annabelle Mourougane
18. Discretionary fiscal policy and recessions Fabrizio Coricelli, Riccardo Fiorito and Francesco Molteni.

Subject Areas: Economic & financial crises & disasters [KCX], Political economy [KCP], International economics [KCL], Macroeconomics [KCB], EU & European institutions [JPSN2]