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The Road to Stable Public Finances The Importance of Being Prudent--Sweden's Fiscal Approach

The Road to Stable Public Finances The Importance of Being Prudent--Sweden's Fiscal Approach. Vincent Reinhart Resident Scholar April 18, 2011. Getting to know a Swedish Model. Vincent Reinhart Resident Scholar April 18, 2011. The fiscal position of AEs and EMEs in 2009…. EMEs. AEs.

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The Road to Stable Public Finances The Importance of Being Prudent--Sweden's Fiscal Approach

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  1. The Road to Stable Public Finances The Importance of Being Prudent--Sweden's Fiscal Approach Vincent Reinhart Resident Scholar April 18, 2011

  2. Getting to know a Swedish Model Vincent Reinhart Resident Scholar April 18, 2011

  3. The fiscal position of AEs and EMEs in 2009… EMEs AEs IMF, Fiscal Monitor (4/11)

  4. …but the IMF expects the situation to improve G-20 EMEs G-20 AEs IMF, Fiscal Monitor (4/11)

  5. Much of the improvement is cyclical in the aggregate … G-20 EMEs G-20 AEs IMF, Fiscal Monitor (4/11)

  6. …and across countries from 2009 to 2011 IMF, Fiscal Monitor (4/11)

  7. As also reflected in the composition of deficit reduction from 2009 to 2011… IMF, Fiscal Monitor (4/11)

  8. We know from R&R that economies grow more slowly after a severe financial crisis…

  9. …and from R&R that economies encumbered by debt grow more slowly

  10. Thus, thereal growth imbalance between AEs and EMEs will stay wide…

  11. With this growth imbalance, Slow-growing AEs will Fast-growing EMEs will Keep monetary policy accommodative Seek to enlarge the market for government debt Continue to import a U.S. monetary policy that is inappropriate for domestic conditions Both will be more favorably inclined to placing restrictions on finance

  12. Vincent Reinhart Resident Scholar 1150 Seventeenth Street, N.W., Washington DC 20036 email: Vincent.Reinhart@aei.org website: http://www.aei.org/scholar/129 Phone: (202) 419-5203

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