Please use this identifier to cite or link to this item: https://hdl.handle.net/10419/267119 
Title (translated): 
Reforming cyclical adjustment in the debt brake
Year of Publication: 
2022
Citation: 
[Journal:] Wirtschaftsdienst [ISSN:] 1613-978X [Volume:] 102 [Issue:] 11 [Publisher:] Springer [Place:] Heidelberg [Year:] 2022 [Pages:] 830-833
Publisher: 
Springer, Heidelberg
Abstract (Translated): 
In this article, we point out requirements for potential output estimates used for cyclical adjustment in the German debt brake. Further, we propose supplementing the cyclical component in the debt break with an error term - regardless of the specific potential output estimation approach. The error term provides fiscal policy more time to adjust to potential output revisions and tax revenue forecast errors. Simulations based on past data show that the error term reduces erratic budgetary adjustments and strengthens automatic stabilisers.
JEL: 
E62
H61
H68
Persistent Identifier of the first edition: 
Creative Commons License: 
cc-by Logo
Document Type: 
Article

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