Fiscal Policy: Institutions Versus Rules

40 Pages Posted: 28 Mar 2002

See all articles by Charles Wyplosz

Charles Wyplosz

University of Geneva - Graduate Institute of International Studies (HEI); Centre for Economic Policy Research (CEPR)

Date Written: February 2002

Abstract

The Paper explores how fiscal policy can be made both more disciplined and more counter-cyclical. It first examines whether the decline of public debts observed in the OECD area during the 1990s can be explained either by less activism or by a priority towards consolidation. It then argues that rules, for example the Stability and Growth Pact, are less likely to deliver the desired outcome than institutions. Drawing a parallel with monetary policy, it examines how a Fiscal Policy Committee could reproduce what Monetary Policy Committees have achieved in central banking.

Keywords: Fiscal policy, discipline, cyclicality, rules and discretion, institutions

JEL Classification: D78, E32, E63, H60

Suggested Citation

Wyplosz, Charles, Fiscal Policy: Institutions Versus Rules (February 2002). CEPR Discussion Paper No. 3238. Available at SSRN: https://ssrn.com/abstract=305596

Charles Wyplosz (Contact Author)

University of Geneva - Graduate Institute of International Studies (HEI) ( email )

PO Box 136
Geneva, CH-1211
Switzerland
+41 22 908 5946 (Phone)
+41 22 733 3049 (Fax)

HOME PAGE: http://heiwww.unige.ch/~wyplosz

Centre for Economic Policy Research (CEPR)

London
United Kingdom

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