IMF Conference

The global financial crisis and the ensuing sharp decline in economic activity has led to a renewed focus on the role of fiscal policy. Many governments around the world have been implementing fiscal stimulus packages, and many have also provided substantial support to the ailing financial sectors. In addition, countries are witnessing the impact of automatic stabilizers—revenue collections have declined sharply and some expenditure programs have automatically increased in response to the decling activity.

These fiscal policy measures raise many critical questions: how effective is discretionary fiscal policy in stimulating acivity; how long are implementation lags, and can they be reduced; what is the role of automatic stabilizers, and what are the tradeoffs in enhancing them; what is the impact of quantitative easing on interest rates; and what role can be played by fiscal rules and independent councils to anchor expectations with regard to government solvency.

The IMF is organizing a conference bringing together leading academics, policymakers and practioners to explore these issues (see program for details). The first session will provide an opportunity for economic modelers to report on recent results regarding the size of fiscal multipliers (based on a modeling workshop organized by the IMF in mid-May). This will be followed by presentations on the effectiveness of discretionary fiscal policy. The afternoon session will explore the efficacy of non-discretionary fiscal policies (including evidence on the working of the automatic stabilizers). The last session will discuss the role of fiscal institutions in enhancing the effectiveness of fiscal policy, and stabilizing expectations with regard to sustainability. The conference will conclude with a high-level panel of academic and policy experts providing insights into the role of fiscal policy.

PROGRAM