Please use this identifier to cite or link to this item: https://hdl.handle.net/10419/46239 
Year of Publication: 
2010
Series/Report no.: 
CESifo Working Paper No. 3303
Publisher: 
Center for Economic Studies and ifo Institute (CESifo), Munich
Abstract: 
This paper presents a review of the most significant fiscal rules policymakers can choose from. The insights from this review are then applied to the current budgetary situation of the European Union. In the European Union, the supranational Stability and Growth Pact (SGP) should provide the necessary guidance in limiting governmental borrowing by member states. In addition to the SGP, European countries are implementing various other fiscal rules that bind central, regional and local governments. We provide empirical estimates of the effect of fiscal rules on fiscal balance, government spending and government revenues, using a Fiscal Rule Index. We find that fiscal rules have some effect on fiscal balances.
Subjects: 
euro area
fiscal policy
policy rules
fiscal sustainability
JEL: 
F31
F41
G15
Document Type: 
Working Paper
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