Fiscal Frameworks – A Macroeconomic Perspective

The Joint Vienna Institute, in collaboration with the IMF's Institute for Capacity Development, delivered an updated two-week course on Fiscal Frameworks in May 2026. The substantially revised program was oriented around a single question: how fiscal policy shapes, and is shaped by the broader macroeconomy.

Across lectures and workshops, participants worked through deficit bias and procyclicality, fiscal rules, the measurement of the fiscal stance, monetary-fiscal interactions, debt sustainability, and the design of fiscal adjustment paths. A general-equilibrium perspective sat at the core throughout, allowing participants to trace the differentiated macroeconomic effects of alternative tax and expenditure instruments and the interplay between fiscal and monetary policy. New and updated course materials were updated to drew on the IMF’ latest analytical work.

Hands-on practice formed the spine of the course. The Comprehensive Adaptive Expectations Model (CAEM), an Excel-based macro-fiscal tool, was used in all workshops, enabling participants to apply each lecture's concepts directly. The program culminated in group scenario-analysis presentations that combined fiscal reaction functions, the design of fiscal adjustments using revenue and expenditure measures, and policy responses to external shocks—while also engaging the communication and credibility dimensions of fiscal policy.

The course brought together twenty-five participants, including eleven women, from nineteen countries, drawn mostly from ministries of finance and central banks. Participants valued the strong foundations the course provided for analyzing the interactions between fiscal policy and the wider economy, and several indicated plans to apply CAEM for scenario analysis and to inform the design of fiscal adjustment paths in their home institutions.

Juan Sebastián Corrales, Economist, IMF