Fiscal Rules: Make them Easy to Love and Hard to Cheat

2019-03-14T12:32:58-04:00April 13, 2018|

By Xavier Debrun, Luc Eyraud, Andrew Hodge, Victor Lledo, Catherine Pattillo, Abdelhak Senhadji

April 13, 2018

Versions in Español (Spanish), Français (French),  Português  (Portuguese)

The national debt clock in New York City: a fiscal rule, like the debt ceiling, should not be set too low or too high. (photo: Frances M. Roberts/Newscom)

Rules to contain lavish government deficits are most effective if countries design them to be […]

Advanced Economies Strengthening, Emerging Market Economies Weakening

2017-04-14T02:15:59-04:00October 8, 2013|

WEOBy Olivier Blanchard

(Versions in عربي, 中文Français日本語, Русский, and Español)

The issue probably foremost on everyone’s mind, is the fiscal situation in the United States, and its potential implications.

While the focus is on the shutdown and the debt ceiling,  we should not forget the sequester, which is leading to a fiscal consolidation this year […]

Time Not On Our Side: Tough Decisions Needed to Strengthen Financial Stability

2017-04-15T14:01:30-04:00October 10, 2012|

As recognized in our Global Financial Stability Report, actions taken by the European Central Bank have helped remove investors’ worst fears. Now policymakers at both the national and euro area level will need to build on these. The stakes are high. For instance, if pressures continue, total assets of major banks in Europe could shrink by as much as $2.8 trillion, possibly leading to a contraction in credit supply in the "periphery" by 9 percent by the end of 2013.

U.S. Fiscal Policy: Avoiding Self-Inflicted Wounds

2017-04-15T14:04:18-04:00August 8, 2012|

In late 2012 or early 2013 the U.S. federal government will again reach a statutory borrowing limit and will not be able to issue additional debt. Why is this a problem? First, because the federal government is spending considerably more than it collects in taxes; and second, because spending and tax collections are not synchronized. As a result, if the ceiling is not raised in time, the government would need to cut spending drastically, curtailing important government functions, with detrimental effects on output and employment. And just the mere possibility that the government might have to delay a payment on a bond could unsettle financial markets.

Between a Rock and a Hard Place: U.S. Fiscal Policy

2017-04-15T14:19:48-04:00July 25, 2011|

The United States faces two pressing challenges to fiscal policy: raise the debt ceiling, and begin the arduous process of reducing deficits and debt. And, right now, this leaves U.S. fiscal policy between a rock and a hard place. How much savings should be found and in what form are crucial questions. So is when to put those savings in effect.
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