The paper argues that the endogenous behavior of monetary authorities provides an important channel through which fiscal policy influences financial variables, and that growing internationalization has increased the sensitivity of financial conditions to fiscal policy. The core of the argument...

This note reflects macroeconomic and fiscal forecasts presented with the April 2009 World Economic Outlook, as well as information on fiscal stimulus and financial and industrial sector support gathered through mid-May. It follows the request by G-20 leaders for the Fund to assess regularly the...