International Monetary Fund

Washington, DC, March 7 and 8, 2011

Macro and Growth Policies in the Wake of the Crisis

SESSION II: Fiscal Policy

Before the crisis, there was broad consensus that monetary policy should be the primary tool of stabilization policy and that fiscal policy should play little role beyond allowing automatic stabilizers to operate. But almost all major countries used discretionary fiscal policy during the crisis. Moreover, the loss of revenues from the crisis and (to a smaller extent) the discretionary fiscal response have exacerbated a long-term trajectory that in many countries was not sustainable even before 2008. These developments raise a host of issues.

Background notes on fiscal policy


Kemal Dervis

The G-20 and Macroeconomic Policy Coordination at the Crossroads: A Macroeconomic Agenda for the G-20

Kemal Dervis, a citizen of the Republic of Turkey, is Vice president for Global Economics and Development at the Brookings Institution, Washington, DC, a member of the Board of Overseers at Sabanci University, Istanbul, and the former Executive Head of the UNDP, from 2005 to 2009



Partho Shome

Partho Shome is Director and Chief Executive, Indian Council for Research on International Economic Relations (ICRIER), New Delhi.

David Romer

The Macroeconomic Effects of Tax Changes

Do Tax Cuts Starve the Beast? The Effect of Tax Changes on Government Spending

David Romer is the Herman Royer Professor of Political Economy at the University of California, Berkeley.

Sri Mulyani Indrawati

Sri Mulyani Indrawati is Managing Director of the World Bank.

Robert Solow

New Ideas for a New World: Robert Solow—Watch the video interview

Activist Fiscal Policy

Rethinking Fiscal Policy

Robert Solow is Professor Emeritus at Massachusetts Institute of Technology.