Table of Contents

The Global Financial Crisis and its Budget Impacts in OECD Nations

The Global Financial Crisis and its Budget Impacts in OECD Nations

Fiscal Responses and Future Challenges

Edited by John Wanna, Evert A. Lindquist and Jouke de Vries

The global financial crisis of 2007–09 constituted the biggest shock to the economies of the OECD nations since the Second World War and caused most of their governments to move into intense crisis mode. They made significant adjustments to their fiscal policy regimes, including massive interventions to stabilize markets and economies. But how they reacted to the crisis, and what measures they took to deal with it, still underpin their economic and budgetary positions. This singular shock provides the editors and authors of this book with an intriguing opportunity to examine how different OECD budgetary systems performed. Chapters cover the EU, North America and Asia, assessing how governments responded to the challenge and how their budget systems evolved in the aftermath.

Chapter 1: Meeting the challenge of the global financial crisis in OECD nations: fiscal responses and future challenges

Evert A. Lindquist, Jouke de Vries and John Wanna

Subjects: economics and finance, public finance, public sector economics


I confess to being continually amazed, and shocked, by the still evolving global financial crisis. If this crisis hasn’t changed at least some of your views about how the world works, then I reckon you haven’t been paying attention – or alternatively, your views are so tightly held as to be impervious to the arrival of new information. (Former Senior Treasury Official, David Gruen, 2009) The global financial crisis of 2007–09 was the most serious crisis to rock global economies in more than 70 years. As it emerged and took shape, it confounded governments, financial institutions, markets and industries, academics and media commentators. Previous certainties and complacencies were abandoned amid a global loss of confidence and perceived regulatory failure. The speed of the crisis and its unexpected and calamitous twists and turns heightened the perception of a ‘meltdown’ scenario and excited fears of a ‘perfect storm’ (Patterson and Koller 2011). In a matter of months, the crisis swept around the globe, impacting on financial markets, economies and government budgets.