The Return to Fiscal Rectitude After the Recent Escapade

Vito Tanzi ()
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Vito Tanzi: International Institute of Public Finance, Munich

Rivista di Politica Economica, 2011, issue 3, 253-277

Abstract: Most of the G20 countries have experienced large deteriorations in their fiscal accounts and large increases in their public debts. This deterioration was only partly the consequence of the financial and economic crisis. The countercyclical policies followed by many countries were not effective because of the poor starting fiscal position of most countries, and because the crisis was not a normal Keynesian crisis of declining aggregate demand but it was connected to large structural imbalances. These two conditions much reduced the potency of the stimulative policies. The paper warns that the financial crisis might become a fiscal crisis.

Keywords: fiscal crisis; fiscal sustainability; public debt, exit strategies; business cycles; economic role of the state (search for similar items in EconPapers)
JEL-codes: E4 E62 H3 H6 (search for similar items in EconPapers)
Date: 2011
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Citations: View citations in EconPapers (1)

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Persistent link: https://EconPapers.repec.org/RePEc:rpo:ripoec:y:2011:i:3:p:253-277

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