Bringing sovereign debt ratios onto a sustainable, downward path represents a key priority for fiscal policy-makers. In this respect, the Stability and Growth Pact provides a sound and flexible framework to steer the timing and speed of fiscal consolidation. Conclusion Let me conclude. In response to the crisis, governments and central banks across the globe have taken immediate and unprecedented measures.
By contrast, investment in infrastructure or education can lift both aggregate demand (using resources) and improve the supply capacity (productivity) of the economy. 10  In addition, households and businesses will change their spending behaviours based on government activities and policies. Labour regulations, border settings, COVID-19 restrictions and various investment rules all have a material impact on the capacity of the economy and inflation.