Fiscal Stimulus Plans: The Need for a Global New Deal Isabel Ortiz

This article reviews the fiscal stimulus packages announced in 43 countries. In March 2009, the total amount announced for these stimulus plans is US$ 2.18 trillion, or 3.5% of world’s GDP, mostly in higher income economies. The majority of these recovery packages contain measures to stimulate firms, consumers, and public investment in infrastructure. The author argues that a country approach is inadequate;a global crisis requires global responses. Developing countries will be hit hard; there is a need for increased ODA to enable them to engage in countercyclical stimulation. Stimulating global demand (and reducing poverty) will require further redistributive measures. Responses have been slow. There is an urgent need for a coordinated expansionary global stimulus package.

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