Fiscal Rules: Useful Policy Framework or Unnecessary Ornament?
24 Pages Posted: 1 Feb 2006
Date Written: September 2001
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.
Keywords: fiscal policy
JEL Classification: E61, E62, H6
Suggested Citation: Suggested Citation