Most countries have one thing in common: Heavily indebted governments. So it would be unrealistic to expect fiscal policy to come to the rescue in the event of a global recession - unless they build up a buffer during the years ahead by engaging in fiscal consolidation.
Any talk of fiscal expansion stepping into the breach when monetary policy authorities run out of the road is, at best, wishful thinking.
Most developed and advanced economies, barring a few exceptions, like Germany and Australia in the developed world, have unsustainably high debt burdens, leaving them little room to move.
The two countries pivotal in determining global growth prospects, the US and China, are not in a position to help much. The US has a debt to GDP level above 100% and looks set to hit its debt ceiling - again - by September. China has some room but, given the economic slowdown unfolding in the world's second-largest economy, its capacity for fiscal stimulus is fast diminishing.
The only two developed countries that do have fiscal space are Germany, with a debt to GDP ratio of just under 60% and Australia, where the need for fiscal stimulus was touted this week by...