The authorities recognize the need for strict fiscal discipline and financial regulation.

The case for returning fiscal responsibility to national authorities is also strong and not only because centralized fiscal authority has proved to be so inefficient.

This requires that fiscal authorities have access to a large pool of liquidity in an emergency.

If Greece still had its own currency, the authorities could devalue it while tightening fiscal policy.

Nonetheless, the Bosnia and Herzegovina authorities took some significant steps towards increasing intergovernmental coordination on fiscal matters.

This means that the fiscal authorities have a big responsibility to target a structural fiscal surplus that is high enough to generate the space needed for real exchange rate depreciation.

Understandably fixated on balance sheet repair, US consumers have not taken the bait from their monetary and fiscal authorities.

In this way, Europe s fiscal and monetary authorities would be forced to cooperate in shaping their input into IMF decisions.

Sometimes monetary and fiscal authorities have an obligation to ignore the wilder historical parallels and look at a broader picture.

Second, they overestimated the extent to which quantitative easing (QE) by the monetary authorities that is, printing money could counterbalance fiscal tightening.

Central banks that buy sovereign debt issued by fiscal authorities offset market imposed discipline on borrowing costs, effectively subsidizing public sector profligacy.

Transferring fiscal responsibility back to national authorities would not only mean the end of counterproductive efforts to manage fiscal affairs centrally it would also diminish the sense of frustration and lack of control that is fueling Euro skepticism.

Until recently, such official finance came from fiscal authorities (the European Financial Stability Facility, soon to be the European Stability Mechanism) and the International Monetary Fund.

Much of this costly divergence from the earlier projections can be attributed to the benign view of fiscal consolidation that UK authorities and the IMF shared.

Overall, the international financial authorities have handled this crisis the same way as they handled previous ones they bailed out failing institutions and applied monetary and fiscal stimulus.

Likewise, the eurozone needs a mechanism to confront runs on its member countries government debt. This requires that fiscal authorities have access to a large pool of liquidity in an emergency.

Moreover, it implies that the crisis is fully under European control, and that the European authorities have elaborated a comprehensive plan that will resolve all of Greece s fiscal and structural problems.

The longer that European authorities postpone the introduction of Eurobonds, an effective banking and fiscal union, and lender of last resort status for the ECB, the longer the crisis will last.

Compared to 2008 2009, when policymakers had ample space to act, monetary and fiscal authorities are running out of policy bullets (or, more cynically, policy rabbits to pull out of their hats).

In a normal economy with its own currency, the fiscal authorities can never face a liquidity shortage, because the government can always rely, at least potentially, on support from the central bank.

Meanwhile, the state lurches from fiscal tragedy to fiscal farce.

Fiscal consolidation was not, however, the result of formal fiscal rules.

Fiscal Follies

Moreover, India s government adopted a pro active fiscal policy, rolling out two rounds of stimulus packages. The authorities pursued pro growth policies, including lower interest rates, expanded credit, and a reduction in excise duties.

This shift not only elevates the importance of the pro consumption agenda of China s 12th Five Year Plan it also calls into question the longstanding proactive tactics of the country s fiscal and monetary authorities.

Fiscal stimulus is turning into fiscal austerity and a drag on growth.

Europe s Fiscal Wormhole

America s Fiscal Isolationism

Fiscal Closing Time?

Fiscal Child Abuse

Germany s Fiscal Follies

India s Fiscal Follies

Shorting Fiscal Consolidation

Alternative Fiscal Medicine?

The impact was greater in countries that had a history of structural fiscal problems, maintained loose fiscal policies, and ignored fiscal reforms during the boom years.

Most important, inflation targeting and independence from the fiscal authorities became core features of mainstream policy a requirement for any country seeking the macroeconomic stability deemed crucial for sustained economic growth and high rates of job creation.

To rein in rising house prices and pre empt the inflationary impact of the strongly expansionary fiscal and monetary policies implemented during the global financial crisis, China s monetary authorities began to tighten financial conditions in January 2010.

America s Exceptional Fiscal Conservatism

Europe s Empty Fiscal Compact

Fiscal Fibs and Follies

Gaming US Fiscal Reform

America s Fiscal Cliff Dwellers

Is Fiscal Stimulus Pointless?

Obama s Difficult Fiscal Summer

Fiscal policy was required.