The Role of Fiscal Policy When Private Debt is High

The Role of Fiscal Policy When Private Debt is High

  photo: familytreasures Excessive private debt is a major headwind against the global recovery. Where fiscal space is available, a more active role of fiscal policies can facilitate an orderly private deleveraging while minimizing its output costs. However, fiscal policy cannot do it alone; it has to be supported by complementary policies within credible frameworks. Globally, […]

The Euro Area Needs a Growth Stimulus Package

For several months, the outlook for the euro area has improved thanks to the positive results that have been achieved over the national and European level.  Budget deficits have decreased considerably since 2011, particularly in the countries hardest hit by the crisis.  Trade deficits of these countries have disappeared through fiscal consolidation and structural reforms […]

Helicopter Drops and Quantitative Easing Are Different

David Beckworth (‘The Wrong Debate: Helicopter Drops vs. Quantitative Easing’, EconoMonitor, December 10) leaves the impression that overt money financing is somehow the same as quantitative easing. He recommends that both approaches should involve a permanent increase in base money, and that both should be anchored to a nominal GDP level/target.  Such recommendations are, no […]