With interest rates at zero where they are expected to remain for a long time, and with the main risk being that inflation is too low, fiscal policy must be active and contribute to cyclical stabilisation

This paper analyzes the behavior of closed-end country fund discounts, including evidence from the Mexican and East Asian crises. We find that the ratio of fund prices to their fundamental value increases dramatically during a crisis, an anomaly that we denote the “closed-end country fund...