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An Agenda for Global Fiscal Activism

LONDON – Two important events loom on the calendar this month: the United States’ presidential election on November 8, and British Chancellor of the Exchequer Philip Hammond’s first Autumn Statement on November 23. Obviously, the latter will not be as significant an event as the former, but it nonetheless will have important consequences beyond the United Kingdom.

So far this year, economics has had to compete with more emotional issues, such as personal attacks in the US election, and UK voters’ decision to leave the European Union. But in both the US and the UK – and not only there – we can expect to hear more about active fiscal policies, especially with respect to infrastructure.

In the communiqué released after September’s G20 summit, the group’s leaders repeatedly mentioned steps to boost world growth through infrastructure investment, and argued for more coordination among monetary, fiscal, and structural policies. Although recent data from the US and China – and surprisingly also from the eurozone and the UK – suggest that GDP growth in the fourth quarter could improve upon the sluggish performance earlier in the year, a strong case can still be made for fresh policies to strengthen the world economy.

After recently leading the UK’s Review on Antimicrobial Resistance (AMR), and having thought long and hard about educational initiatives, I believe that it is time for a more adventurous response to both long-term and cyclical challenges, especially for developing countries. And reading Jeffrey D. Sachs’s recent commentary, “The Case for Sustainable Investment,” only strengthens my conviction that policymakers and key development-finance institutions have a huge opportunity.