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How to Ensure Debt Sustainability and React to Economic Cycles? The Upgrade of Fiscal Rules in Armenia

Author

Listed:
  • Eduard N. Hakobyan

    (Macroeconomic Policy Department, Ministry of Finance of the Republic of Armenia, Yerevan 0010, Armenia)

  • Narek N. Karapetyan

    (Macroeconomic Policy Department, Ministry of Finance of the Republic of Armenia, Yerevan 0010, Armenia)

Abstract

The article discusses the international experience and theoretical foundations of fiscal rules, problems of Armenia’s fiscal policy, the upgrade of fiscal rules in Armenia and the directions for their future improvement. The authors consider the reforms of fiscal rules in the sphere of Armenia’s fiscal policy as a crucial change in the logic of policy, because new rules aim at significant increase of the fiscal policy role in ensuring public debt sustainability on the one hand and respond to economic cycles on the other hand.

Suggested Citation

  • Eduard N. Hakobyan & Narek N. Karapetyan, 2018. "How to Ensure Debt Sustainability and React to Economic Cycles? The Upgrade of Fiscal Rules in Armenia," Finansovyj žhurnal — Financial Journal, Financial Research Institute, Moscow 125375, Russia, issue 4, pages 10-20, August.
    • Handle: RePEc:fru:finjrn:180401:p:10-20
    DOI: 10.31107/2075-1990-2018-4-10-20
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    References listed on IDEAS

    as
    1. Fatas, Antonio & Mihov, Ilian, 2006. "The macroeconomic effects of fiscal rules in the US states," Journal of Public Economics, Elsevier, vol. 90(1-2), pages 101-117, January.
    2. Luc Eyraud & Xavier Debrun & Andrew Hodge & Victor Duarte Lledo & Catherine A Pattillo, 2018. "Second-Generation Fiscal Rules; Balancing Simplicity, Flexibility, and Enforceability," IMF Staff Discussion Notes 18/04, International Monetary Fund.
    3. Marc Robinson, 1998. "Measuring compliance with the Golden Rule," Fiscal Studies, Institute for Fiscal Studies, vol. 19(4), pages 447-462, November.
    4. Kellermann, Kersten, 2007. "Debt financing of public investment: On a popular misinterpretation of "the golden rule of public sector borrowing"," European Journal of Political Economy, Elsevier, vol. 23(4), pages 1088-1104, December.
    5. Mr. George Kopits, 2001. "Fiscal Rules: Useful Policy Framework or Unnecessary Ornament?," IMF Working Papers 2001/145, International Monetary Fund.
    Full references (including those not matched with items on IDEAS)

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    More about this item

    Keywords

    fiscal rules; “golden rule” of public finances; public debt sustainability; economic cycles; economic growth; current and capital expenditures;
    All these keywords.

    JEL classification:

    • E62 - Macroeconomics and Monetary Economics - - Macroeconomic Policy, Macroeconomic Aspects of Public Finance, and General Outlook - - - Fiscal Policy; Modern Monetary Theory
    • E32 - Macroeconomics and Monetary Economics - - Prices, Business Fluctuations, and Cycles - - - Business Fluctuations; Cycles
    • G28 - Financial Economics - - Financial Institutions and Services - - - Government Policy and Regulation
    • H62 - Public Economics - - National Budget, Deficit, and Debt - - - Deficit; Surplus
    • H63 - Public Economics - - National Budget, Deficit, and Debt - - - Debt; Debt Management; Sovereign Debt

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