Fiscal Monitor

Fiscal Monitor, October 2014

Front Matter

Chapter 1: Recent Fiscal Developments and Outlook
With the recovery uneven, uncertainties still widespread, and social tensions rising, fiscal policy must find ways to put public finances on a firmer footing while at the same time supporting long-term growth. Specifics of course vary across country groups. In advanced economies, weak recovery and low inflation call for a delicate balance between support for growth and debt sustainability. Emerging markets should take advantage of their still favorable positions to rebuild policy buffers. And low-income countries should decisively strengthen fiscal governance to make productive use of their natural and financial resources. But in all cases fiscal policy must, maybe more than in the past, incorporate measures aimed at increasing productivity, employment, and long term growth.

Chapter 2: Can Fiscal Policies Do More for Jobs?
At a time when job creation tops the policy agenda globally, this issue of the Fiscal Monitor explores if and how fiscal policy can do more for jobs. It finds that while fiscal policy cannot substitute for comprehensive reforms, it can support job creation in a number of ways. First, deficit reduction can be designed and timed to minimize negative effects on employment. Second, fiscal policy can facilitate structural reforms in the labor market by offsetting their potential short term costs. And third, targeted fiscal measures, including labor tax cuts, can help tackle challenges in specific segments of the labor market, such as youth and older workers.

Methodological and Statistical Appendix

Back Matter