The Case for Global Fiscal Stimulus

This paper highlights that worldwide expansionary fiscal policy combined with accommodative monetary policy can have significant multiplier effects on the world economy. It also provides a framework for assessing the effects of fiscal actions needed. The IMF emphasizes the role of public sector authorities in preventing a collapse of confidence in the private sector that might lead to a vicious downward spiral. The IMF also calls for fiscal stimulus in as many countries as possible, including emerging market and advanced economies.