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.