Fiscal Policy: Ready for the Next Shock?
December 14, 2017Washington, DC and Online

Fiscal positions in many emerging market and developing economies have weakened considerably since the global financial crisis. This will constrain the room for policy makers in these economies to utilize fiscal policy when the next shock hits.

In this talk, Franziska Ohnsorge, Manager within the Development Prospects Group, will address the following questions. First, what is fiscal space? Second, how has fiscal space evolved in emerging market and developing economies? Third, what are the implications of diminishing fiscal space?

Four distinct dimensions of fiscal space will be analyzed—debt sustainability, debt composition, potential contingent liabilities, and market perception of fiscal space. Emerging market and developing economies built fiscal space in the run-up to the Great Recession of 2008-09, which was then used for stimulus. Since then, fiscal space has shrunk and remains narrow as these economies have taken advantage of historically low interest rates. Franziska will show how a lack of fiscal space can undermine the effectiveness of fiscal policy by reducing fiscal multipliers.

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    Franziska Ohnsorge, Manager, Development Prospects Group

    Franziska Lieselotte Ohnsorge is a Manager in the Development Prospects Group within the Development Economics Vice Presidency. Prior to joining the World Bank, Franziska worked as Senior Economist in the Office of the Chief Economist of the European Bank for Reconstruction and Development, working on regional surveillance, forecasting, and financial sector policy issues.
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    Asli Demirgüç-Kunt, Director of Research Department, World Bank

    Asli Demirgüç-Kunt is the Director of Research in the World Bank. After joining the Bank in 1989 as a Young Economist, she has held different positions, including Director of Development Policy, Chief Economist of Financial and Private Sector Development Network, and Senior Research Manager, doing research and advising on financial sector and private sector development issues.
  • Sudarshan Gooptu, Global Lead, Macroeconomics and Fiscal Management Global Practice

    Sudarshan (Shan) Gooptu is the Global Lead for Fiscal Policy in the Global Practice for Macroeconomics and Fiscal Management with 25 years’ experience in the World Bank where he has had research, operational and managerial roles. His assignments have included work on: debt and fiscal policy and risk management; assessments of fiscal risks from PPPs and contingent liabilities, public expenditure reviews, emerging markets' portfolio flows, sovereign debt buyback and restructuring operations; policy-oriented macroeconomic research.

The Policy Research Talks showcase the latest findings of the research department and their implications for World Bank operations. The monthly event facilitates a dialogue between researchers and operational staff so that we can challenge and contribute to the World Bank's intellectual climate and re-examine conventional wisdom in current development theories and practices. Read More »

Event Details
  • Time: 1:00 – 2:30 PM, December 14, 2017
  • Location: MC 13-121, World Bank Main Complex
  • CONTACT: Tourya Tourougui