BIS Annual Conference: Fiscal policy and its implications for monetary and financial stability
This post was written by Philip Lane
The recent BIS annual conference focused on fiscal policy: the impressive set of papers and discussions are available here.
The paper by Roberto Perotti on “The ‘Austerity Myth’: Gain without pain?” is especially interesting for an Irish audience - he revisits previous adjustment episodes (including Ireland in the late 1980s) and provides new evidence on why fiscal austerity is intrinsically contractionary in the short term. The written discussion by Carlo Cottarelli of the IMF is also worth reading.