When Is Repaying Public Debt Not Of The Essence?

2019-03-27T16:21:15-04:00June 2, 2015|

By Jonathan D. Ostry and Atish R. Ghosh

Financial bailouts, stimulus spending, and lower revenues during the Great Recession have resulted in some of the highest public debt ratios seen in advanced economies in the past forty years. Recent debates have centered on the pace at which to pay down this debt, with few questions being asked about whether the debt needs to be paid down in the first place.

A radical solution for high debt is to do nothing at all—just live with it. Indeed, from a welfare economics perspective—abstracting […]

Taking Stock: Public Finances Now Stronger in Many Countries

2017-04-15T14:01:32-04:00October 9, 2012|

The slow global recovery is making fiscal adjustment more difficult around the world, but this doesn’t mean that little has been accomplished. In fact, significant progress in many countries has been made during the past two years in strengthening their fiscal accounts after the 2008–09 deterioration.

Beyond the Austerity Debate: the Deficit Bias in the post-Bretton Woods Era

2017-04-15T14:07:42-04:00May 21, 2012|

The growth versus austerity debate is detracting attention from policy issues that may seem less urgent, but which are nevertheless critical in the medium term. I am referring to what I would call the institutional gaps in fiscal policymaking that still exist in most advanced and emerging economies. These gaps have contributed to a bias in the conduct of fiscal policy in favor of deficits that is behind many of the current problems.

Escaping the Resource Curse

2017-04-15T14:08:00-04:00May 16, 2012|

In our study, we analyze how fiscal frameworks for resource-rich countries be made more flexible in practice from a practitioner’s perspective, proposing specific options to effectively anchor fiscal policy while allowing for a sustainable scaling up of spending in the context of increased resource revenue.

Disappearing Deficits

2017-04-15T14:10:44-04:00March 28, 2012|

In our work at the IMF, we sometimes discover that governments choose to employ accounting devices—or stratagems that make the deficit smaller without actually causing any pain, and without actually improving public finances. In ideal accounting, this would not be possible. In real accounting, it sometimes is.

Wising Up to the Rising Costs of Aging Populations

2017-04-15T14:19:31-04:00August 14, 2011|

The world is on the threshold of a stunning demographic transformation caused by falling fertility and rising life expectancy. Global aging promises to affect every dimension of economic, social, and political life—from the shape of the family to the shape of the world order.

Ten Commandments for Fiscal Adjustment in Advanced Economies

2017-04-15T14:36:39-04:00June 24, 2010|

We offer ten commandments so that fiscal strategies can be designed to make them consistent with both short-term and long-term growth requirements. Put simply, what advanced countries need is clarity of intent, an appropriate calibration of fiscal targets, and adequate structural reforms. With a little help from monetary policy, and from their (emerging market) friends.
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