IMF,interesting update

 

In the new issue of Finance & Development, contributors examine how fiscal policy can be retooled for the post-pandemic world.

Dear maria, We just published a new blog—please find the full text below.  Rethinking Fiscal Policy and Debt for a Post-Pandemic World (ART: PETER REYNOLDS) By Gita Bhatt Dear Readers, Nearly a century ago, Joseph Schumpeter wrote, “The spirit of a people, its cultural level, its social structure…all this and more is written in its fiscal history…. The public finances are one of the best starting points for an investigation of society.” The innovative fiscal responses to the pandemic’s economic fallout bear him out. The power and agility of fiscal policy were far beyond what was previously thought possible. Governments channeled cash directly to households and businesses to save jobs and livelihoods. As the IMF’s Vitor Gaspar notes, these actions demonstrated government’s “special role in protecting the vulnerable when things go wrong.” But now, the bill is coming due. Governments face the tricky task of reducing unprecedented debt to more sustainable levels while ensuring continued support for health systems and the most vulnerable. In this issue of Finance & Development, contributors examine how fiscal policy can be retooled for the post-pandemic world to deliver public value and a balanced economy for all. But we still have to keep an eye on debt. “When does the level of debt become unsafe?” asks Olivier Blanchard. He rejects simple fiscal rules and says policymakers must consider tough questions on the interplay of such variables as the outlook for interest rates, economic growth, and political stability. For Arminio Fraga, the old numerical thresholds for debt and deficits only made sense in an era of unusually low interest rates that can’t be counted on to last. Still, new fiscal rules are needed, he argues. Amid the post-pandemic inflationary spurt, Ricardo Reis warns that price stability matters more than ever if debts are to stay sustainable. Debt transparency is essential. In emerging market and developing economies, ever vulnerable to debt crises and rising interest rates, Ceyla Pazarbasioglu and Carmen M. Reinhart urge governments to make a complete accounting of hidden debts, both public and private, to sustain growth and avoid the risk of default. Social questions matter, too. Emmanuel Saez defends the need for an expansive welfare state. Paolo Mauro argues that policymakers can muster broader support if they consider the full range of moral perspectives on public finance. Other contributors reflect on fiscal balancing acts to address inequality—including through progressive taxes and spending aimed at universal access to health and education—and support the green transition. How are some countries using fiscal policy to meet a changing world head on? Case studies from Belize, Colombia, and Ghana showcase efforts to align fiscal policies with efforts to limit climate change, increase tax transparency, and harness digitalization for more effective revenue collection. And as our “In the Trenches” interview with Cina Lawson, minister of digital economy and transformation in West Africa’s Togo shows, even small, developing nations are surpassing advanced economies when it comes to innovative fiscal policies to help people in need. Policymakers face myriad uncertainties, including rapid changes in the geopolitical environment, and difficult trade-offs. They must prepare to adjust priorities to create economies that are fairer, more inclusive, and sustainable. After all, how a society manages its fiscal affairs decides the fate of the nation and the well-being of its people. Gita Bhatt Editor-in-chief, Finance & Development Jeff Kearns Managing Editor IMF Blog jkearns@IMF.org   Thank you again for your interest in IMF Blog. Read more of our latest content here. Take good care! As conflict in Europe riles world markets, governments face the tricky task of reducing debt to sustainable levels. Dear maria, The pandemic underscored the importance of good fiscal policy in saving lives and livelihoods. Now, as renewed conflict in Europe and rising geopolitical risks rile world markets, governments face the tricky task of reducing debts to more sustainable levels. In our March 2022 issue of F&D Magazine we focus on rethinking fiscal. In response to the pandemic, fiscal policy has taken on a key role in macro-economic stabilization. It's also raised questions about debt sustainability, the importance of tax revenue and new ways of thinking about public finance management. "How a society manages its fiscal affairs decides the fate of the nation and the well-being of its people,"  writes F&D editor-in-chief Gita Bhatt. The cover art for this issue, created by artist Peter Reynolds, features a money tree losing leaves as a storm approaches, symbolizing the need for government spending in times of crisis. In this issue, a lineup of accomplished authors provide insight and analysis on some of the biggest issues policymakers face when it comes to fiscal policy ranging from debt to institutional frameworks to taxation. In addition, we have complementary podcasts, videos, and other multimedia elements to stimulate your thinking. FEATURED ARTICLES: A Fine Balancing Act | Vitor Gaspar Deciding When Debt Becomes Unsafe | Olivier Blanchard Shining a Light on Debt | Ceyla Pazarbasioglu and Carmen M. Reinhart A Call for New Fiscal Rules | Arminio Fraga Steady Prices, Sustainable Debt | Ricardo Reis Fiscal Institutions and the Pandemic | Felipe Larrain Bascuñan Understanding the Social State | Emmanuel Saez Taxing for a New Social Contract | Alex Cobham The Education Pandemic | Yamini Aiyar Meeting the Future | Analisa R. Bala, Adam Behsudi, and Nicholas Owen Adding Ethics to Public Finance | Paolo Mauro Tackling Inequality on All Fronts | David Amaglobeli and Celine Thevenot Mapping the Unknown | Ian Ball, John Crompton, and Dag Detter Currency Revolution | Interview with Eswar Prasad Also in this issue: Prakash profiles the University of Chicago's Marianne Bertrand for our People in Economics series. Togo's minister of digital economy and transformation, Cina Lawson, explains in our In the Trenches interview series how her country has harnessed technology to deliver fiscal policy. Our Picture This series, led by Andrew Stanley, provides the big picture on global inequalities. Ruud de Mooij and Arthur Swistak provide a run down on value-added taxes in our Back to Basic series. Finally, in our Currency Notes series Melinda Weir writes how Mexico is featuring literature and butterflies on its banknotes. We also review three new books: Career & Family: Women's Century-Long Journey Toward Equity by Claudia Goldin The Global Currency Power of the US Dollar by Anthony Elson Harry White and the American Creed: How a Federal Bureaucrat Created the Modern Global Economy (and Failed to Get the Credit) by James M. Boughton. Nick Owen Senior Editor F&D Magazine nowen@IMF.org