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Komfie Manalo, Opalesque Asia:

A paper released by J.P. Morgan Asset Management has suggested that fiscal policy will play a more active role in heading off negative outcomes for economies and markets in the coming years. Moreover, the change in policy is unlikely to pose a grave challenge to the creditworthiness of governments.

The paper, "Fiscal therapy: Prospects for a policy-driven boost to growth," explored the outlook for global fiscal policy and the potential implications for multi-asset investors.

"Considerable dissatisfaction among policymakers and voters surrounds economic performance in developed and emerging economies alike. Despite very supportive monetary policy stances, growth is running at a weak pace by historical standards," said Michael Hood, global strategist, Multi-Asset Solutions, J.P. Morgan Asset Management. "To a large extent, this sluggishness reflects a structural slowdown in potential growth, driven by demographic changes. As central banks continue to explore ways of boosting demand and acting in increasingly unconventional fashions, the calls for greater use of fiscal stimulus have grown louder."

The study also found that the contribution of fiscal policy to global growth is poised to rise in the coming years. While large-scale fiscal easing se......................

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