Not only is QE s ability to jumpstart crisis torn, balance sheet constrained economies limited it also runs the important risk of blurring the distinction between monetary and fiscal policy. Central banks that buy sovereign debt issued by fiscal authorities offset market imposed discipline on borrowing costs, effectively subsidizing public sector profligacy.

America s profligacy  the fact that the world s richest country could not live within its means was often criticized. But perhaps the world should be thankful, because without American profligacy, there would have been insufficient global aggregate demand.

America s profligacy the fact that the world s richest country could not live within its means was often criticized. But perhaps the world should be thankful, because without American profligacy, there would have been insufficient global aggregate demand.

To be sure, the economic mess created in Greece the result of government profligacy, official corruption, and widespread tax evasion merited some international assistance. And the IMF did impose conditions on its loans to Greece including fiscal austerity, privatization, and structural reform of its pension and tax systems most of which were necessary to address the country s insolvency.

Fiscal Challenges and Fiscal Follies

And here was the clincher By committing themselves to fiscal tightening, finance ministers gave themselves scope for some fiscal loosening. Proclaiming fiscal virtue enabled them to practice fiscal vice.

While rainy day funds that accumulate in boom years are used to deal with temporary revenue shortfalls, the states general obligation borrowing is limited to capital projects like roads and schools. Even a state like California, seen by many as a poster child for fiscal profligacy, now has an annual budget deficit of just 1 of its GDP and a general obligation debt of just 4 of GDP.

Fiscal Follies

Europe s Fiscal Wormhole

America s Fiscal Isolationism

Fiscal Apocalypse Now

Germany s Fiscal Follies

There is little doubt that the suffering that Greeks have had to endure for the last five years is mainly attributable to the fiscal profligacy and poor public management of a procession of Greek governments. But as most analysts, including at the IMF, now agree, the troika s approach was also deeply flawed, as it emphasized wage and income cuts, while neglecting the reform of product markets and the dismantling of harmful public and private oligopolies.

No leading country in world history has persistently maintained a negative saving rate. Trade deficits with China or any other country are part of the price that America pays for its unbridled profligacy.

Computes Italian Fiscal codes

America s Exceptional Fiscal Conservatism

Europe s Empty Fiscal Compact

Fiscal Fibs and Follies

Gaming US Fiscal Reform

America s Fiscal Cliff Dwellers

Is Fiscal Stimulus Pointless?

Threading the Fiscal Needle

Fixing America s Fiscal Problem

e. Special fiscal policies

This is the wrong cure for the eurozone crisis. The Merkel doctrine holds that the crisis is the result of government profligacy, so only a hard balanced budget rule can prevent such crises from recurring.

Fiscal Austerity Versus European Society

Fiscal Discipline and Educational Quality

Lessons from the Fiscal Cliff

Ireland s Moment of Fiscal Decision

The Bogey of Fiscal Stimulus

The Case for Fiscal Stimulus

The Fiscal Crisis Down Below

Will Europe s Fiscal Compact Work?

Fiscal year ending 30 September

Country Kazakhstan Fiscal year 2004

Emergency budget and fiscal support

Osborne s defenders might make the same argument for his fiscal policy. A credible policy of fiscal consolidation, they might say, will have the same exhilarating effect on confidence as fiscal consolidation itself.

Moreover, fiscal support is absent this time QE1 and QE2 helped to prevent a deeper recession and avoid a double dip, respectively, because each was associated with a significant fiscal stimulus. In contrast, QE3 will be associated with a fiscal contraction, possibly even a large fiscal cliff.

The number of local government jobs averaged 11,626 in fiscal year 2003, compared to 11,621 jobs in fiscal year 2002.

Japan s Fiscal Crisis Comes of Age

A Future Oriented US Fiscal Policy

Fiscal Follies in America and Beyond

America s Healthy Path to Fiscal Health

But the room for fiscal policy is wider, so governments must do two things urgently. First, in countries in which there is fiscal space, they must announce credible fiscal expansions we the IMF believe that, as a whole, a global fiscal expansion about 2 of world GDP is both feasible and appropriate.

A Balance Sheet Approach to Fiscal Policy