Those economists who expected the increasing US budget deficits in recent years to have a negative impact on private investment spending have so far been proved wrong. Hans-Peter Fröhlich provides an analysis of what has happened and examines the interrelation between public sector deficits and...

With the spectre of a recession looming in the eurozone (and elsewhere), the policy question arises as to how much leeway do the fiscal authorities in the eurozone have to follow counter-cyclical fiscal policies aimed at providing some stimulus to the economy.

EU fiscal rules are meant to keep public finances on a sustainable path. This paper presents a new database that tracks numerical compliance with the four main rules of the Stability and Growth Pact starting in 1998. Our assessment of numerical compliance abstracts from the many exceptions and...

The Swiss debt brake served as a model for the new German budget rule. The two tools share the long-term goal of rendering fiscal policy sustainable by stabilising nominal debt as well as the short-term goal of smoothing the economic cycle. Debt brakes thus act as an automatic stabiliser within...