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Notes on "A Code for Fiscal Stability"

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  • Willem H. Buiter

Abstract

This note comments on two central issues for fiscal policy design in the UK, highlighted in the recent Code for Fiscal Stability' proposed by the new Labour government. The first concerns the merits of the so-called golden rule of public sector investment' -- the proposition that, over the cycle, government borrowing should not exceed government capital formation. The second concerns the case for attempting to construct a more comprehensive balance sheet of public sector assets and liabilities, including tangible public sector assets and certain contingent claims. The two main conclusions are that the golden rule is without merit but that, subject to some important caveats, the construction of a more comprehensive government balance sheet is a worthwhile enterprise.

Suggested Citation

  • Willem H. Buiter, 1998. "Notes on "A Code for Fiscal Stability"," NBER Working Papers 6522, National Bureau of Economic Research, Inc.
  • Handle: RePEc:nbr:nberwo:6522 Note: ME
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    References listed on IDEAS

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    1. David Card, 1992. "The Effect of Unions on the Distribution of Wages: Redistribution or Relabelling?," NBER Working Papers 4195, National Bureau of Economic Research, Inc.
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    6. McKinley L. Blackburn & David E. Bloom & Richard B. Freeman, 1989. "The Declining Economic Position of Less-Skilled American Males," NBER Working Papers 3186, National Bureau of Economic Research, Inc.
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    More about this item

    JEL classification:

    • E62 - Macroeconomics and Monetary Economics - - Macroeconomic Policy, Macroeconomic Aspects of Public Finance, and General Outlook - - - Fiscal Policy
    • H62 - Public Economics - - National Budget, Deficit, and Debt - - - Deficit; Surplus

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