The paper analyses theoretically what role fiscal councils could play and surveys empirically the activities of existing councils. Case studies of the Swedish Fiscal Policy Council and the UK Office for Budget Responsibility are done. It is concluded that fiscal councils should be advisory,...

The paper compares the boom-and-bust cycles in Japan and Europe with respect to the reasons for excessive booms, the characteristics of the crises, and the (potential) effects of the crisis therapies. As in Japan the consequence of expansionary monetary and fiscal policies is the hysteresis of...

The paper analyses how independent fiscal watchdogs (fiscal policy councils) can strengthen the incentives for fiscal discipline. By increasing fiscal transparency they can raise the awareness of the long-run costs of current deficits and increase the reputational costs for governments of...

Intro -- Contents -- I. INTRODUCTION -- II. MACROECONOMIC VOLATILITY IN LATIN AMERICA: A HISTORICAL PERSPECTIVE -- III. ROLE OF MACROECONOMIC POLICIES -- IV. WHAT'S NEW THIS TIME AROUND? -- V. REMAINING AGENDA -- VI. CONCLUDING REMARKS -- REFERENCES.

The Swedish Fiscal Policy Council (FPC) set up in 2007 is one example of the recent international trend to create independent fiscal watchdogs. The FPC has established itself as an important participant in the Swedish economic policy discussion. The FPC has small resources and a broad remit...