With interest rates at all-time lows and global monetary policy clearly nearing extremes, it could soon be time to start talking about unconventional fiscal policy.

Since at least the 1990s, ‘fiscal responsibility’ has been the catchword in New Zealand. Under this approach, the focus has been to keep government debt to GDP low and manageable, typically aiming to bring the budget back to surplus in good time.

Within this framework, there were three main reasons that governments tried to avoid using an active fiscal stance to manage the economy. Download the PDF to read more.