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Author: Philip Lane
Lorenzo Bini-Smaghi addresses this topic in this speech.
Jarek Rostowski is finance minister of Poland. Writing in the FT, he argues that a record of compliance with the agreed EU/IMF programme should lead to a dramatic decline in the interest rate, with the near-complete elimination of the margin over the cost of funds. The article is here.
The government has announced the establishment of the Irish Fiscal Advisory Council – the details are here.
Congratulations in particular to regular contributor John McHale on his appointment as Chair of the Council. Best wishes to all the Council members on their new task.
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.