Rethinking Fiscal Policy after the Crisis

Description

Before the financial crisis, fiscal policy often played a secondary role to monetary policy, with the manipulation of interest rates to hit inflation targets being the main instrument of macroeconomic management. However, after the financial crisis and the subsequent euro crisis, fiscal policy has been brought back to the fore. In the past, the limited understanding of the effects of fiscal policy, neglect of monetary-fiscal interactions, faulty institutional set ups or ignorance of market expectations often led to bad policies. This book, written by a team of leading economists, seeks to address the current oversight of fiscal policy and to upgrade our understanding and conduct of fiscal policy, presenting a well-balanced diagnosis and offering several important lessons for future fiscal analysis and policymaking. It is an essential read for academics and graduate students focused on the current debate over fiscal policy, as well as policymakers working on day-to-day policy issues.

Ludovit Odor is a member of the Council for Budget Responsibility in Slovakia and Vice Chair of the Network of EU Independent Fiscal Institutions. In the past, he has served as a member of the Bank Board at the National Bank of Slovakia and Executive Director responsible for research, an advisor to the Prime Minister and as a Chief economist at the Ministry of Finance of the Slovak Republic. His book, The Euro Area and the Financial Crisis (Cambridge, 2014), was written with Miroslav Beblavy and David Cobham.

'We are now about eight years into the global financial crisis and we are slowly emerging from it, but not quite out of the woods yet. This is a respectable amount of time, however, to begin to reflect upon what has been happening and to look for lessons learned. Undoubtedly there has been an avalanche of papers and books written from a variety of perspectives on the global financial crisis. This book is different. Firstly, it examines fiscal dimensions of the crisis. This is an area that has not attracted the attention that it should. Secondly, it blends practitioner and academic perspectives with an attention to the detail of policy institutions which is absent from other attempts.' Peter M. Jackson, University of Leicester 'In this collection of essays, some of the most prominent economists in the field analyse fiscal policy issues today. The resulting book is of excellent academic quality, touching on topical subjects relevant to both academic and policy circles.' Evi Pappa, European University Institute, Florence