By looking at the macroeconomic frameworks and experiences of countries such as Germany, Sweden, and Switzerland, Restoring Sustainable Macroeconomic Policies in the U.S. presents a way for the United States to normalize fiscal and monetary policy in order to achieve sustainable debt in the post-COVID-19 era.

This report builds on the work in the 2013 Board paper on Fund Engagement with Small States, the 2013 background papers on Asian and Pacific small states and Caribbean small states, and the 2014 staff guidance note. It provides a deeper analysis and policy recommendations in respect of three challenges identified in these papers. Looking ahead, the paper also analyses the impact and possible policy responses to two global economic trends—lower oil prices and diverse movements in major currencies.

Reflecting diseconomies of scale in providing public goods and services, recurrent spending in small states typically represents a large share of GDP. For some small states, this limits the fiscal space available for growth-promoting capital spending. Small states generally face greater revenue volatility than other country groups, owing to their exposure to exogenous shocks (including natural disasters) and narrow production bases. With limited buffers, revenue volatility often results in procyclical fiscal policy as the econometric analysis shows. To strengthen fiscal frameworks, small states should seek to streamline and prioritize recurrent spending to create fiscal space for capital spending. The quality of spending could also be improved through public financial management reform and multiyear budgeting.

In response to the largely closed-economy assumptions of most cross-national work on economic policy-making, Open States in the Global Economy offers an outside-in framework for analyzing the way in which national economic sovereignty is affected by globalization. This framework is then applied to a detailed case study of Norway's economic policy in the postwar period. The 'Open State' framework offers a new way to interpret how external changes affect domestic policy-makers and their preferences.

This paper reviews the macroeconomic characteristics and performance of small states and discusses ways in which the Fund's engagement with these countries could be better tailored to meet their needs. The Fund previously examined small states issues in 2000, informed by a Joint Task Force Report of the Commonwealth Secretariat (CS) and World Bank. Small states continue to face many of the same challenges they did then, and the 2000 Small States Report remains the foundation for much of the work in this area, both inside and outside the Fund. However, the relative macroeconomic performance of small states has deteriorated since the late 1990s, and a fresh look is warranted.

This book reviews the implementation of macroeconomic policies in Malta, identifying the key issues, lessons learnt and best practices which could be adapted by other small states. It also sets out the country's challenges for the future, including attending to the conflicting demands of environmental conservation and economic development.

Increasing integration of the world economy, in both trade and capital markets, holds out the promise of mutual gains to countries from the coordination of their macroeconomic policy decisions. In this paper I describe the theoretical case for coordination, evaluate empirical estimates of the potential gains, review the history of macroeconomic policy coordination, and discuss the prospects for increased coordination. The theoretical argument is seen most clearly in the consideration of fiscal expansion. Any one country that expands will create a current account deficit; all countries expanding together avoid that problem. In principle coordination is always better, but empirical estimates suggest the likely gains are small because the effects of policy in one country on the economies of other countries are small. Further, uncertainties about the effects of policy, reflected in differences among econometric models, mean that countries may have very different views on the likely outcomes of agreements--and therefore that some of them are bound to be disappointed. Information exchanges and some coordination on trade policy take place in a large number of international organizations and frameworks. But the breakdown of the Bretton Woods system suggests that international differences in policy goals are too large for systematic macroeconomic policy coordination among the major economies to take place anytime soon. Occasional agreements on particular policy packages are possible, and coordination does take place in the framework of the European Monetary System