Tuesday, June 2, 2009

Fiscal policy

I attended today a very interesting conference on the role of fiscal policy at the IMF. I presented a paper on the role of automatic stabilizers. It is interesting that there are very few academic papers that have looked into the effectiveness of automatic stabilizers. In my paper I argue that the evidence suggests that automatic stabilizers are effective and should not be ignored. I also find that in recent years countries with smaller automatic stabilizers have compensated with more aggressive discretionary fiscal policy (e.g. the US has smaller automatic stabilizers than Europe but in the current crisis has used discretionary fiscal policy more aggressively). The program of the conference and copies of the papers can be found at the IMF web site.

If the link above stops working, you can find a copy of my presentation here.

Antonio Fatás