Vitor Gaspar, director of the Fiscal Affairs Department of the International Monetary Fund, presented the IMF's new assessment of the relationship between fiscal policy and economic growth on June 30, 2015, at the Peterson Institute. Adam S. Posen led a discussion with Doug Elmendorf, recently appointed dean of the Harvard Kennedy School and former director of the Congressional Budget Office.
Restoring strong growth is a key policy priority in the aftermath of the global financial crisis. The Fund's new paper explores how fiscal policy can help lift the long-term growth potential of advanced, emerging-market, and low-income countries. It distills practical lessons for policymakers by drawing on several complementary analytical approaches, including country case studies that cover a diverse spectrum of reform experiences across income groups and regions. The paper finds that fiscal policies can indeed facilitate higher growth over the medium- to long-term and that the effectiveness of fiscal reforms is enhanced if they are complemented with supportive structural and macroeconomic policies.
Gaspar has been director of the Fiscal Affairs Department of the IMF since June 2014. He served as minister of state and finance of Portugal during the critical period of 2011–13. Prior to becoming minister, he held a variety of senior policy positions in Banco de Portugal, including most recently as special adviser. He was head of the European Commission's Bureau of European Policy Advisers during 2007–10 and director-general of research at the European Central Bank from 1998 to 2004.
Elmendorf served as the director of the Congressional Budget Office from 2009 to 2015. Prior to this appointment, he was a senior fellow at Brookings from 2007 to 2009, where he was director of the Hamilton Project. He is the author of numerous studies on fiscal policy and previously served in a number of senior staff positions at the Federal Reserve Board, the US Treasury, and the Council of Economic Advisers.
June 30, 2015