Fiscal policy has witnessed a double U-turn, or policy pirouette, over the last few years because of the financial crisis. Explaining the new policy requires understanding what first triggered the initial changes and then the ensuing policy reversal. This project first answers the questions of “why,” “when,” and “how” exactly these dramatic transformations took place and what exactly the changes were, both pertaining to the composition of public spending and its financing. The project entails an investigation of the US experience as well as that of its NAFTA partners and other countries, especially in Europe and the developing world.
The Political Economy of the New "Fiscalism"