Ranking Fiscal Policy Rules: the Golden Rule of Public Finance vs. the Stability and Growth Pact
AbstractThe purpose of this note is to compare the characteristics of the actual Stability and Growth Pact with that of a European "modified golden rule". The latter would consist in achieving in each EU country a cyclically-adjusted net-of-public-investment balance. The benchmark for comparison is the classification adopted by Kopits and Symansky (1998) on "ideal fiscal rules". This classification has been used by Buti et al. (2003) in order to demonstrate the "ideal character" of the actual Stability and Growth Pact and thus legitimate only slight modifications to the Pact. I intend to show rather, that the "modified golden rule" is a better fiscal rule than the actual Pact.
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Bibliographic InfoPaper provided by Observatoire Francais des Conjonctures Economiques (OFCE) in its series Documents de Travail de l'OFCE with number 2003-04.
Date of creation: 2003
Date of revision:
euro area; fiscal rule; golden rule; Stability and Growth Pact;
Other versions of this item:
- Jérôme Creel, 2003. "Ranking Fiscal Policy Rules: the Golden Rule of Public Finance vs. the Stability and Growth Pact," Sciences Po publications NÂ° 2003-04, Sciences Po.
- E61 - Macroeconomics and Monetary Economics - - Macroeconomic Policy, Macroeconomic Aspects of Public Finance, and General Outlook - - - Policy Objectives; Policy Designs and Consistency; Policy Coordination
- H30 - Public Economics - - Fiscal Policies and Behavior of Economic Agents - - - General
- H60 - Public Economics - - National Budget, Deficit, and Debt - - - General
- H70 - Public Economics - - State and Local Government; Intergovernmental Relations - - - General
This paper has been announced in the following NEP Reports:
- NEP-ALL-2003-10-12 (All new papers)
- NEP-EEC-2003-10-12 (European Economics)
- NEP-PBE-2003-10-12 (Public Economics)
- NEP-PKE-2003-10-12 (Post Keynesian Economics)
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