Fiscal Rules: Useful Policy Framework or Unnecessary Ornament?
September 1, 2001
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Summary
With the primary objective of conferring credibility on macroeconomic policies, an increasing number of advanced and emerging market economies have adopted various forms of fiscal rules (mainly balanced-budget requirements and debt limits). In contrast to previous fiscal rules, many of which lacked transparency, recently introduced rules have the potential of serving as a useful depoliticized policy framework, and over time, can contribute to stability and growth. To this end, they need to be well designed and supported by an appropriate institutional infrastructure.
Subject: Budget planning and preparation, Fiscal policy, Fiscal rules, Inflation targeting, Monetary policy, Public debt, Public financial management (PFM)
Keywords: arbitration authority, authorities discretion, below-cost pricing, Budget planning and preparation, country, default risk premium, Europe, fiscal policy, Fiscal rules, General government, government, government assets, Inflation targeting, surveillance authority, WP
Pages:
24
Volume:
2001
DOI:
Issue:
145
Series:
Working Paper No. 2001/145
Stock No:
WPIEA1452001
ISBN:
9781451856545
ISSN:
1018-5941
