Please use this identifier to cite or link to this item: http://hdl.handle.net/10419/45268
Authors: 
Perée, Eric
Välilä, Timo
Year of Publication: 
2005
Series/Report no.: 
Economic and financial reports / European Investment Bank 2005/02
Abstract: 
This paper examines the link between fiscal rules and public investment both normatively and empirically. We first review the arguments for and against including public investment spending in a fiscal deficit rule. We then seek to assess the determinants of public investment, with a special focus on the role of the fiscal rules embodied in EMU. We conclude that there are practical difficulties precluding the introduction of a 'golden rule' and that there is virtually no evidence that EMU would have affected public investment. Therefore, the focus on safeguarding the level of public investment is somewhat misplaced; instead, one should focus on safeguarding its productivity.
JEL: 
E62
E65
H54
C23
Document Type: 
Working Paper

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