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Briefing

Global Fiscal Stimulus Measures

Appears in: Advanced Economies, Asia/Pacific, Europe, North America, Macro View, North East Asia, Pacific, South East Asia, Taiwan, United Kingdom, Current Account, Current Financial Crisis, External Balance, Fiscal Policy, IMF and International Economic Institutions

Critical Issues

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Background:

The depth of the global downturn sparked unprecedented injections of stimulus funding by many G20 governments since late-2008. Measures have included tax cuts for households and firms and higher spending on workers, public services and infrastructure. The stimulus plans have helped stabilize the global economy and arrest the downward trajectory of the crisis by offseting sluggish private demand and boosting household spending and investment by firms. At the various G20 and G7 meetings, global leaders have stressed that they will maintain fiscal stimulus measures until domestic demand recovers and economic recovery becomes sustainable. Some analysts have voiced concerns that stimulus measures will have a temporary impact on growth but a permanent negative impact on the fiscal balances of countries.

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Associated Readings

Analysis IMF Apr 26, 2009 IMF Update on Fiscal Stimulus and Financial Sector Measures Analysis Brookings Institution Eswar Prasad and Isaac Sorkin Mar 06, 2009 Understanding the G-20 Economic Stimulus Plans Analysis ILO Mar 03, 2009 International Fiscal Stimulus Packages: Global Fiiscal Stimulus Effort as a Percentage of GDP News Bloomberg Steve Scherer and Roger Runningen Jul 08, 2009 G-8 to Prepare Exit Strategy Once Recovery Assured Blogs Dani Rodrik's weblog Kevin P. Gallagher Feb 27, 2009 A global survey of stimulus plans Analysis Citigroup Global Markets Julian Bu et al Jan 21, 2009 Global Steel Perspectives: Slower Growth Drives Caution, but Fiscal Stimulus is Positive Analysis International Monetary Fund Steve Symansky et al Dec 29, 2008 Fiscal Policy for the Crisis Opinions Project Syndicate Hans-Werner Sinn May 01, 2009 Germany: the world’s biggest shock absorber Analysis Alliance Bernstein Kazuhiko Ogata Apr 17, 2009 Will Record Fiscal Stimulus Cure Japan’s Woes? Analysis Citigroup Apr 13, 2009 Asian Macro Views: Re-visiting Fiscal Sustainability Analysis IMF Mar 06, 2009 The Case for Global Fiscal Stimulus Analysis la Caixa February 2009 Is Keynesianism Coming Back? Opinions VoxEU.org Keiichiro Kobayashi Apr 27, 2009 Fiscal policy Again? A Rebuttal to Mr Krugman Analysis RGE Global Macro EconoMonitor Mark Thoma Oct 11, 2008 Desperate Times Require Desperate Measures Opinions Financial Times Nov 07, 2008 Blogs Crisis Talk, World Bank Simeon Djankov Mar 10, 2009 Spain's Stimulus News Economic Observer Mar 09, 2009 China's Stimulus Package: A Breakdown of Spending Analysis JPMorgan Chase Feb 03, 2009 Australia fiscal stimulus package up to 4% of GDP Analysis JPMorgan Chase Bank Marta Bastoni Feb 11, 2009 Euro area fiscal plans target most vulnerable sectors Blogs Econbrowser Menzie Chinn Feb 16, 2009 Recap: The Stimulus Bill and the Macro Impact News Financial Times Andrew England and Abeer Allam Dec 23, 2008 Saudi Arabia to boost public spending

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