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Fiscal consolidation through fiscal rules?

Author

Listed:
  • Alexandra ADAM

    (Bucharest University of Economic Studies)

  • Silvia Elena IACOB

    (Bucharest University of Economic Studies)

Abstract

Following the financial crisis, the budget deficits and public debt have recorded levels that no one would have considered a few years ago. Therefore, efforts are needed to achieve fiscal consolidation. Both in academic debates and policy many believe that fiscal rules should be the central element of a successful strategy, idea argued by the fact that a rule would restrict the discretionary actions of the government, thus strengthening the fiscal consolidation. However, there are differences when it comes to precisely specifying a rule. Therefore, in this article we want to analyze how much policy makers can rely on fiscal rules, factors necessary to achieve a high degree of effectiveness of fiscal rules, if a fiscal rule should be based on the budget balance level or the debt balance level and we will analyze whether the restrictions imposed ex-ante to the fiscal policy are superior to the ex-post penalties.

Suggested Citation

  • Alexandra ADAM & Silvia Elena IACOB, 2014. "Fiscal consolidation through fiscal rules?," Theoretical and Applied Economics, Asociatia Generala a Economistilor din Romania - AGER, vol. 0(2(591)), pages 109-114, February.
  • Handle: RePEc:agr:journl:v:xxi:y:2014:i:2(591):p:109-114
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    Citations

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    Cited by:

    1. DUMITRESCU, Bogdan Andrei, 2015. "The Fiscal Framework In Romania – The Efficiency Of Fiscal Rules," Studii Financiare (Financial Studies), Centre of Financial and Monetary Research "Victor Slavescu", vol. 19(3), pages 91-106.
    2. Bogdan Andrei DUMITRESCU, 2015. "The Coordination of the Monetary and Fiscal Policies in Romania and their Impact on the Economic Cycle," Romanian Journal of Economics, Institute of National Economy, vol. 40(1(49)), pages 184-197, june.
    3. repec:ine:journl:v:40:y:2015:i:49:p:158-171 is not listed on IDEAS

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