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Book abstract: After two decades of relative neglect, fiscal policy is back at the center of the economics research agenda. The fiscal developments around the global financial crisis of 2007-2009 and its aftermath are undoubtedly a major factor behind that comeback. The large fiscal stimulus packages adopted by many countries in the face of large adverse shocks have triggered an unusually heated debate among academics, policymakers and commentators alike. In ten contributions written by economists with a recognized expertise in the field, this book shed light on the key questions at the aftermath of crises: How effective is fiscal policy at stimulating the economy? What is the best design for a fiscal stimulus package? Should it put most of its weight on government spending increases or on tax reductions? Are automatic stabilizers enough or is a discretionary stimulus needed? How does fiscal policy interact with monetary policy? Is there room for coordination? What are the possible consequences for the economy of a large rise in the debt/GDP ratio? And those of the fiscal consolidations aimed at stabilizing that ratio? Finally, should countries adopt explicit fiscal rules?


Frankel, Jeffrey A. "A Solution to Fiscal Procyclicality: The Structural Budget Institutions Pioneered by Chile." Fiscal Policy and Macroeconomic Performance: Volume 17. Ed. Luis Felipe Céspedes and Jordi Galí. Banco Central de Chile, 2013.