An early criticism of the Stability and Growth Pact has pointed to its asymmetric nature and the weak mechanisms to prevent politically-motivated fiscal policies: its constraints would bite in downswings but not in upswings, especially if in the latter the electoral cycle increases the...

During the past decade, the formulation of fiscal policy has been increasingly founded on medium-term considerations associated with public debt and economic efficiency. In this regard, this paper, and the ones by Olivier Blanchard and Edward Gramlich in the same Working Paper Series, considers...

This paper examines the problems raised by the recent sharp increases in the ratio of public debt to GNP in most OECD Member countries. When interest rates exceed growth rates, this development appears as a symptom of instability in public finances. The paper also analyses the evolution of...

This paper discusses several aspects of the medium-term orientation of OECD countries' economic policies in the 1980s, concentrating on monetary and fiscal instruments. The developments that led to the adoption of such a "medium-term strategy", and the apparent analytical rationale for it, are...

An early criticism of the Stability and Growth Pact has pointed to its asymmetric nature and the weak mechanisms to prevent politically-motivated fiscal policies: its constraints would bite in downswings but not in upswings, especially if in the latter the electoral cycle increases the...

It is often claimed that tax and welfare reforms that aim at enhancing efficiency may come at the cost of cyclical stabilisation. Reducing the generosity of welfare systems and lowering taxes may boost efficiency and output, and improve market adjustment to shocks. But, by reducing the size of...