Fiscal authorities across the world face a dilemma: how best to respond to the challenges of slackening global activity and continued financial volatility without losing sight of their medium-term adjustment needs. How large is the negative impact of fiscal adjustment on activity in the current recessionary context? What should countries do to avoid undue pressures on activity and employment, while not slowing or delaying efforts to put public finances on a sounder footing over the medium term? How does fiscal space differ between advanced and emerging countries? What roles should fiscal rules play? By examining in detail the concept of fiscal space, these and other related questions were addressed in the April 2012 Fiscal Monitor of the IMF, which was presented at the seminar.
- Speaker: Xavier Debrun, IMF Deputy Division Chief
- Discussant: Zsolt Darvas, Research Fellow at Bruegel
- Chair: Jean Pisani-Ferry, Director of Bruegel