Fiscal Responses and Future Challenges
Edited by John Wanna, Evert A. Lindquist and Jouke de Vries
Chapter 1: Meeting the challenge of the global financial crisis in OECD nations: fiscal responses and future challenges
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.