Beyond 2015: Maintaining Ireland’s Public Finances on a Sustainable Path
In this note, three mechanical fiscal rules that are designed to maintain a sustainable path for the public finances are examined. Adherence to a strict numerical target for the deficit ratio has a procyclical effect on the economy’s growth rate. Building a safety margin into deficit targets in the manner of the Stability and Growth Pact allows the public finances to have a stabilising influence on the growth cycle and ensures a lower average government debt ratio is achieved over time. A debt target rule would result in a different path for the structural primary budget balance and the debt ratio over time even when the long run targets for those variables were the same as under the Pact.
Year of publication: |
2011-07
|
---|---|
Authors: | Cronin, David |
Institutions: | Central Bank of Ireland |
Saved in:
freely available
Saved in favorites
Similar items by person
-
Spillover in Euro Area Sovereign Bond Markets
Conefrey, Thomas, (2013)
-
Fiscal fan charts - A tool for assessing member states’ (likely?) compliance with EU fiscal rules
Cronin, David, (2011)
-
Measuring Structural Budget Balances in a Fast Growing Economy: The Case of Ireland
Cronin, David, (1999)
- More ...