Numerical fiscal rules in practice
AbstractDespite four year of unprecedented fiscal consolidation efforts, Greece does not yet have (national) numerical fiscal rules, which could help contain primary expenditure and anchor expectations about public finances in Greece. This paper examines practical aspects associated with the implementation of such rules. Issues including what categories of expenditure should be subject to the rule, how inflation is dealt with, how expenditure categories which fluctuate significantly across the cycle are treated and the extent to which the rule should apply to future years are all examined. Additionally, there is a discussion of how revenue projections and the targeted fiscal balance are used to determine the expenditure ceiling. Finally, the paper analyses how “indirect rules”, such as the “debt brake”, can operate as effective expenditure rules.
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Bibliographic InfoArticle provided by Bank of Greece, Economic Research Department in its journal Economic Bulletin.
Volume (Year): (2011)
Issue (Month): 35 (June)
numerical fiscal rules;
Find related papers by JEL classification:
- E61 - Macroeconomics and Monetary Economics - - Macroeconomic Policy, Macroeconomic Aspects of Public Finance, and General Outlook - - - Policy Objectives; Policy Designs and Consistency; Policy Coordination
- E62 - Macroeconomics and Monetary Economics - - Macroeconomic Policy, Macroeconomic Aspects of Public Finance, and General Outlook - - - Fiscal Policy
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