Rethinking Fiscal Policy and Debt for a Post-Pandemic World by Gita Bhatt published by IMF (3/2022).
“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…”
