Title:	Beyond Macroeconomic Stability
Authors:	Iyanatul Islam and David Kucera
Keywords:	Structural Transformation
Issue Date:	2013
Publisher:	Palgrave Macmillan
Description:	The Great Recession of 2008–2009, while wreaking havoc on the lives of millions, also raised expectations that the preoccupation with a conservative strain of macroeconomics under the rubric of the ‘Washington consensus’ that dominated the 1980s and 1990s would eventually come to an end.2 This in turn entailed the expectation of a new beginning: namely, macroeconomic and sectoral policies geared towards supporting the quest for structural transformation and inclusive development. The countercyclical policies that were adopted by systemically important countries across the world to stave off a global depression in 2008–2009, the renewed commitment to assist developing countries to attain the Millennium Development Goals (MDGs) by 2015 and the endorsement of the ‘social protection floor (SPF) initiative’ by the United Nations (UN) system in April 2009 appeared to signal a robust affirmation of the international community’s commitment to meet the key aspirations of the global development agenda. Unfortunately, all indications are that, in the spheres of macroeconomic and labour market policies at least, a ‘business as usual scenario’ might prevail. Evidence gleaned from a study of 67 International Monetary Fund (IMF) Article IVs for 27 countries of the European Union (EU) for 2008–2011 suggest that the emphasis on fiscal consolidation is particularly strong and many countries have also embarked on wide-ranging labour market and so-called structural reforms.3 Another study that draws on 314 IMF national reports in 174 countries identifies three phases of policy developments between 2008 and 2015. The first phase, entailing fiscal expansion, covers 2008–2009. The second phase runs from 2010 to 2012, which entails the onset of fiscal contraction. The third phase pertains to 2013–2015 and is expected to culminate in an intensification of fiscal contraction. The average degree of projected downward adjustment in public spending is 3.7 per cent for a sample of 68 developing countries compared to a cut in public expenditure of 2.2 per cent in 26 high income countries. For the entire sample, the study finds that 25 per cent of the countries covered will experience ‘excessive fiscal contraction’ defined as cutting public expenditure below pre-crisis levels. Thus, we seem to have entered a global ‘age of austerity’.4
URI:	http://10.6.20.12:80/handle/123456789/51332
ISBN:	978-1-137-37925-2
Appears in Collections:	Population Studies

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